The way we live today is drastically different than the way we lived ten years ago. The way we work has been flipped on its head as well with the advent of co-working — bringing the added flexibility, reduced overhead and outsourced branding and management commercial real estate so desperately needed. Obviously, when people think of disruption in the residential living and hospitality space, the first company that comes to mind is Airbnb. I am a huge fan of Airbnb, as I’ve already written. But there’s so much more going on this space, specifically the residential component, and the ever-expanding opportunities continue to excite me.
Co-living is a concept that has gained steam over the past decade — with companies like Common, Ollie, Lyric, Starcity, WeLive (WeWork) and OpenDoor gaining steam as key players. I think this concept certainly alleviates a problem — people are paying for real estate they don’t fully utilize. By consolidating amenities and common spaces into shared amenities, leaving only bedrooms as “private”, owners are able to provide a high-end experience to tenants that feel comfortable sharing these amenities.
The pros of co-living are plentiful — many companies’ units are fully furnished, outfitted with wifi, and provide a certain level of flexibility for tenants to move amongst properties. Some provide differentiated services like free laundry, weekly cleaning and dinners or events. For people who are new to a city or looking to build a community, this can offer a great built in network of like-minded people.
This concept is not without its various cons as well. Sharing bathrooms and common spaces is not for everyone. The lack of privacy can certainly get old. For those who prefer to personalize their living spaces, there’s far less liberty to do so when only a small portion is your own. The units are also still somewhat pricey for what you’re getting, especially in prime cities. In Williamsburg, Brooklyn Common’s units start at $2,050 — which to me is a steep price to pay for very little personal space.
The bottom line is that it’s done well for certain personality types, but the broader segment still has room to grow.
There are several companies that are trying to plug the gaps and get their slice of the pie.
Roam (one of my favorites) is a company that’s building a concept around living and working on the move, by converting boutique hotels in desirable travel destinations into places where people can live, work and play. They are differentiated by positioning their company as more of an experience brand, where they pride themselves on creating an environment where residents interact and share with each other, with different adventures and events planned for those tenants. You can book a Roam for a week or several months. I’d love to try one of these the next time I travel for business to see it in action.
Sonder has a cool take on this where they provide fully-furnished units that are “tastefully designed” to compete more with hotels and Airbnb’s than actual residential units. They have a very asset-heavy model by leasing and then subleasing space afterwards and essentially scaling their own branded apartments in highly desirable cities. I think they take advantage of a lack of consistency and brand with Airbnb units, but there’s still a lot left to be desired for me with this particular model in terms of adding real value for someone constantly on the move. There’s still a transaction every time you book, so there’s not much disruption happening with this model.
Remote Year is an interesting company playing into this concept in a far different way. They take a group of people and travel the world for a full year, living in a different city for 30 days at a time. Everyone on the trip has a full-time job that allows them to work remotely — varying from freelance designers and software engineers to marketers and consultants. It’s a living, breathing testament to the possibilities that come with the digital nomad lifestyle. The more digitally enabled we become, the more companies will allow employees to benefit from these types of experiences, as long as productivity remains high. I think these guys will be here for the long-haul but there’s not much stopping others from joining them in the space.
Although the way we live has started to change drastically, I am passionate about the fact that there is plenty of room to do more and continue to push the boundaries. I’ve been thinking about the idea that housing should be more flexible, and I have a thesis about living that I’ve been kicking around for a while in my head. I have shared it with people close to me but haven’t broadcast it outright in fear that the idea is not as thought out as I’d like it to be.
I believe there’s another way to provide a differentiated living experience, other than owning the real estate (or the leases associated with units) to then re-lease while providing a curated experience. I have a vision for a digitally enabled network that ties vacant units from various cities and ownership groups together to add value to both landlords and tenants who want to be flexible. Almost like a network for housing that has “members”, rather than tenants tied to specific units. It would have to be worth-while for owners to want their units added to this network, but also for residents to want to pay a premium for a unit in this network. Owners and developers have set the trend of marketing amenity-rich projects. Could flexibility be an amenity in itself?
I’m not talking about corporate housing — because I think that has limitations both in terms of offerings and accessibility. My thought is that this issue needs to be addressed in an asset-light manner where the third party managing the infrastructure manages the relationship between these landlords and the residents. I don’t know quite how it would work logistically, but in my head I do feel there is a desire for this type of platform.
The residential living arena is very exciting right now. There has been so much created that will help change the way people live, work and travel for many decades to come. I am eager to see how the space continues to advance.