It's no secret that the US housing market is having somewhat of a crisis—its major cities, specifically, having a shortage of affordable housing and rent is only getting more expensive. Businesses within the real estate industry have had to evolve to keep up with the needs of the many. This is where "co-living" space comes in, and why it's been gaining popularity.
Inspired by the coworking phenomenon only made more popular by coworking aggregator, WeWork, these co-living spaces have been looking to create their own community-oriented living arrangements and shared spaces, but for a price that most American millennials can stomach.
New York-based Common, which launched in its home town in 2015, claims to be the largest co-living operator in the U.S., with 700 beds in 25 properties across six cities. And it’s now plotting its largest expansion yet, Fortune has learned. Common is teaming up with real estate developers in Philadelphia, Atlanta, Pittsburgh and San Diego on $300 million worth of new properties in those cities over the next three years. The projects will more than quadruple Common’s current footprint—adding more than 2,200 beds for rent across the four new markets.
Common’s current portfolio focuses on high-priced coastal housing markets, including New York, San Francisco/Oakland, Seattle, and Washington, D.C. But the expansion speaks to the broader demand for the concept, Brad Hargreaves, Common’s founder and CEO, tells Fortune. “A lot of the value propositions—the convenience, the shared communities, the amenities we offer—appeal to people beyond just expensive coastal hubs,” he says.
Tenants in a typical co-living arrangement each have their own lease, covering their bedroom and shared spaces in a group suite. In Common’s case, those bedrooms and suites are fully furnished, and the cost of cleaning and maintaining the shared spaces and providing kitchen and bathroom supplies (not to mention utilities and Wi-Fi) is bundled into the rent. Common is able to keep rents lower, Hargreaves says, in part “by densifying these buildings,” putting more units within the same spatial footprint than you’d find in a typical apartment property.
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