Co-living execs offer glimpse at occupancy rates

With thousands of units in the pipeline, industry executives predict difficult year ahead

TRD NATIONAL /
Jul.July 16, 2020 05:00 PM
The co-living industry has thousands of units in the pipeline. Industry leaders are predicting a tough year ahead (Pixabay)

The co-living industry has thousands of units in the pipeline. Industry leaders are predicting a tough year ahead (Pixabay)

Before the pandemic, co-living executives were looking to capitalize on demand for shared, low-cost accommodation — specifically targeting young professionals in major cities.

But now, with thousands of units in the pipeline, the pandemic has called the sector’s business model into question — and executives are predicting a tough 12 to 24 months, according to Business Insider.

“There are a lot of people who are concerned, including us, about the impact of the virus on the co-living sector, given the type of density and how it could drive occupancy lower,” said Carlos Burneo of real-estate investment company Nuveen, which has two co-living conversions in the works. But he said he was confident in the resilience of the housing sector.

Among the other challenges facing co-living, the shift toward remote work may slow the movement of young professionals heading to major urban centers for jobs.

Still, some executives say demand has been steady in recent months — offering hope going forward.

Brad Hargreaves, CEO of Common, told BI he had sustained an occupancy level of about 90 percent across his portfolio, which he attributed to the need for low-cost housing. That’s down from 98 percent pre-pandemic. Unit rents have dropped by up to 15 percent.

“People assume that renters join co-living for the events and gatherings and socialization, but that’s not really the case,” he said. “When we poll our members why they joined, about 60 percent say it’s the affordability.”

Ollie, which operates two co-living facilities in Manhattan and Long Island City, reported that occupancy levels fell to 80 percent. The company’s president, Gregg Christiansen, attributed the decline to the “shut down” of the international market.

[Business Insider] — Sylvia Varnham O’Regan


Related Articles

arrow_forward_ios
CEO Sean Daly (iStock)

Miami-based title startup Expetitle completes seed fundraising

Miami-based title startup Expetitle completes seed fundraising
Foyer Wynwood and Jonathon Yormak

East End Capital scores approval for co-living project in Wynwood

East End Capital scores approval for co-living project in Wynwood
Brad Hargreaves

Common managing Nuveen apartment buildings in Fort Lauderdale, LA

Common managing Nuveen apartment buildings in Fort Lauderdale, LA
Rendering of East End Capital

East End Capital launches co-living platform with first project in Wynwood

East End Capital launches co-living platform with first project in Wynwood
Home 61's Olivier Grinda

Home61 shuts down, to reopen as 100% commission brokerage

Home61 shuts down, to reopen as 100% commission brokerage
Noah Bachow and a rendering of Flagler Creative

Fort Lauderdale urges redesign of Flagler Village project with co-living

Fort Lauderdale urges redesign of Flagler Village project with co-living
The Residences of United Home Care (Credit: Google Maps)

Grove Isle developers pay $17M for West Kendall assisted living facility

Grove Isle developers pay $17M for West Kendall assisted living facility
Daily Digest Miami

The Fed lowered rates and real estate is loving it, JPMorgan dives into Miami affordable housing: Daily digest

The Fed lowered rates and real estate is loving it, JPMorgan dives into Miami affordable housing: Daily digest
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...