Less than two years after Property Markets Group launched its own co-living business, the Kevin Maloney-led firm said it has $1 billion worth of inventory in the hopper.
In partnership with Raven Capital Management, a New York-based private equity firm, PMG has committed $300 million in equity to building X Social Communities, which it described as a multifamily housing division. XSC has 10,000 units in the pipeline nationwide, according to Noah Gottlieb, a principal at PMG.
“Our product provides incredible value to our customers,” he said, noting that unlike companies like Ollie or Common, PMG is both an owner and operator of co-living properties.
According to Gottlieb, PMG isn’t trying to create a niche market. “We are intent on cannibalizing the existing apartment universe,” he said, by developing luxury units that can be rented by the bedroom. Ryan Shear leads X Social Communities.
Between 20 percent to 50 percent of units in each development have a “Rent by the Bedroom” component. “It’s important for our customers to be able to graduate within our building,” Gottlieb said.
Last year, PMG became one of the first major developers to jump into co-living — a segment of the market mostly dominated by specialized companies until now. It currently offers co-living at the 120-unit X Logan Square in Chicago, the 99-unit X Chicago and the 464-unit X Miami.
Planned apartments include the 650-unit X Las Olas in Fort Lauderdale and the 220-unit X Denver, both set to open in 2020. Other projects are in the works in Orlando, Phoenix and Oakland.
In addition to PMG, other major developers who’ve gotten into co-living include the Durst Organization, which is testing the concept at its Frank 57 West. Boston Properties, Vornado Realty Trust and Rudin Management have partnered with, or invested in, niche companies like Common, Ollie and Founder House.