Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
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CCIM.COM November | December 2017 27 CO-LIVING TREND DIGS DEEPER by Beth Mattson-Teig The sharing economy is taking off in multiple industries — from bicycles and cars to hotels and workspace. So, why not apartments? Co-living models already have a long history in the housing market, with examples such as hostels, college dorms, and group homes, among other venues. Developers are putting a new twist on co-living concepts with an eye on providing a lifestyle alternative and a more affordable housing option, particularly in urban areas where housing costs are soaring. In Los Angeles, co-living has become not only popular, but necessary to manage the high rental costs, according to Sharon Carz, CCIM, a senior adviser at Sperry Van Ness | SVN Rich Investment Real Estate Partners in Los Angeles. "Most developers have taken this into consideration with regard to the unit mix and design choices," she says. The co-living spaces that are emerging come in many shapes and sizes. "There are several different variants depending on the socio-economic status of the specific neighborhood, but this has been going on in the northeast market for two decades," says Chris Cervelli, CCIM, owner of Cervelli Real Estate and Property Management in North Bergen, N.J. Ollie is one branded co-living concept where residents enjoy hotel-style conveniences, such as high-speed Wi-Fi, premium television programming, and weekly cleaning and fresh linens. The company opened its first location, Ollie at Carmel Place, in Manhattan in 2016. The property contains 55 studio apartments that range in size from 260 to 360 square feet, with shared spaces such as laundry facilities, a gym, a lounge, and a rooftop terrace, along with organized social events aimed at creating a greater sense of community among building residents. Ollie has since opened a second location in Pittsburgh and has more projects underway or planned for Queens, N.Y.; Jersey City, N.J.; and Los Angeles. Co-working innovator WeWork also has introduced its own co-living concept. WeLive currently offers flexible, fully furnished dorm-style rental apartments in New York City and Washington, D.C. For some renters, the market rate co-living properties being developed are a more affordable option that bridges the gap between student housing and a traditional apartment, says Daun St. Amand, senior vice president at CallisonRTKL in Los Angeles. The questions are how deep is that market? And how long will millennials be willing to continue in that shared lifestyle before they want or need more independent space? "Group living may be a temporary bridge between graduating from college and entering the workforce and being able to afford your own place, whether renting an apartment or buying a home," he says. magann