Co-living is one of the newest trends in urban housing. Sometimes called dormitories for grown-ups, co-living tenants get their own bedroom and bathroom and share common spaces such as kitchens, living rooms and amenities like music rooms, art studios and meeting rooms with other tenants.
According to the CEO of Node, a major London-based player in multiple countries in the co-living arena, Anil Khera, “The younger generation of renters is looking for Instagram-worthy, full turnkey solutions for housing in an affordable way that embraces urban community living.”
Los Angeles is becoming a mecca for co-living development. Most recently completed in October 2018, Common, a New York-based co-living operator, partnered with Proper Development, a Los Angeles-based real estate development company, to create Common Melrose in Hollywood. Once ready to welcome tenants, Common Melrose received over 9,000 applications for its 24 units. Priced a full 20% less than comparable co-living complexes in similar neighborhoods, Common Melrose’s monthly rent of $1,550 monthly rent includes utilities, high speed Wi-Fi and common area cleaning services.
Due to such off-the-charts demand, this partnership of Proper Development and Common intends to build and operate seven additional co-living buildings in Los Angeles over the next 2-3 years for a total of 600 beds. The partnership is looking at neighborhoods such as Mar Vista, Echo Park, Koreatown, Larchmont and Playa Vista for its eminent expansion. Node, Star-City, the California Landmark Group, Quarters and We Live are also vying for co-living projects in these and other (Playa del Rey, Venice Beach, Los Feliz, Westwood, Silver Lake, Hollywood) LA neighborhoods.
Co-living projects in Los Angeles and elsewhere in major urban centers are designed to serve workers making between $40,000 – $80,000/year…young professionals as well as empty nesters who either can’t or don’t want to afford rent in hipper, more desirable neighborhoods.
Kindred Quarters, a local co-living developer and operator, offers tenants a fully stocked house in the Silicon Beach area of West Los Angeles. Its tenants have a full-time chef and concierge to do all the shopping, cooking and appointment making duties inherent to daily living. Kindred Quarters also provides weekly mastermind meetings, network building events, co-working parties and monthly “Those That Inspire” dinner parties as well as built-in accountability for people in the process of creating their professional lives.
Justin Maheen, co-founder of Timber, recently invested $25M in Proper Development’s co-living projects and plans to double his investment during 2019. “The potential (for co-living) is enormous…multi-family development has been slow to adapt to the needs of modern renters, but now lenders are increasingly recognizing co-living as an attractive asset class. We are seeing an influx of institutional capital entering the market to co-invest with us.”