When people speak of coliving, they tend to think of Common, Ollie, Roam, Starcity, and the Collective UK. These companies are all relatively new. Most are asset light. And though many have raised respectable sums of money, the volume of units they operate or own is a rounding error compared to the number of units development and/or managed by folks like Greystar, AvalonBay, and Related. With the exception of Vornado’s partnership with WeLive, behemoth multifamily developers have stayed out of the coliving/shared-living scene in any official capacity.
That could possibly change.
Last year, Property Markets Group (PMG), a developer with $6B in completed projects and operating 80 buildings across the country, announced a sub-brand dubbed X Social Communities. PMG chose ‘social community’—as opposed to coliving—because they’re not keen on being called an adult dorm, according to their Dir. Brand Experience Brian Koles. Nevertheless, X bears a striking similarity to coliving: smaller units, big amenities, furnished rooms and apartments, roommate matching, and a ‘Rent By Bedroom‘ program, where each roommate has his or her own lease.
PMGx differs some from the standard bearers of the burgeoning coliving market. One, they’re acting as developer/owner/operator (only Starcity and The Collective UK are doing that). X is also staying away from NYC, SF, LA, and Boston where most operators and owners are setting up. Instead, they are building in less constrained (and less expensive) cities like Miami, Chicago, and Denver.
By virtue of the markets X serves, unit and bed prices are lower than in top-tier cities. Leasing just began on X Miami, where rents range from $1,300-$2,800 with a unit mix of studios to shared three beds (Koles said the $1300 beds in shared units were leased out immediately. This lends credence to the notion that price, location, and amenities trump the need to have your own apartment). Their X Chicago, which opens July 15, has rents ranging from $1,100-$2,600 with a studio, one, two, three, and four bedroom mix. These rents aren’t necessarily cheap for their markets, but it’s important to note these are furnished apartments and beds (almost all en-suite) in Class A, luxury buildings with great amenities.
And then there’s the scale. Their beta building, X Logan Square in Chicago, had 120 units. X Miami has 464 units. X Chicago has 99 units. The PMG site shows more buildings planned in Chicago, Denver, and Fort Lauderdale. Koles says they’re looking to bring 10K+ units coming online in next 5-7 years. These numbers are substantially higher than the most every coliving project to date, with the exception of Ollie’s 422 bed Alta project.
It will be a critical few years in terms of whether coliving is here to stay. The success of big projects like X and Alta by Ollie could be the validation other larger developers need to take shared apartments seriously. Conversely, their lack of success could be the segment’s death knell. And it’ll be interesting to see other companies move into different markets and segments. Common, for example, has an upcoming project in Newark and an affordable housing project in New Orleans. Several companies are moving into suburban coliving.
With an ever-worsening affordability crisis, a growing trend toward shared living, and significant cooling in your standard, luxury rental, coliving has the potential to serve great numbers of heretofore underserved renters and enter the canon of standard multifamily operating models.