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Purchasing Commercial Real Estate: Why “We Living” Properties Are A Smart Investment

We living” is one of the newest commercial real estate trends, and it’s continuing to grow. Co-living properties are popping up in big cities all over the country. The “we living” concept is distinct from traditional apartment living because it offers a dorm-style environment where tenants rent a private apartment but share common spaces like large living areas, patios and communal laundry. “We living” buildings also encourage residents to connect with one another by hosting community events, classes and social opportunities.

If you’re interested in buying commercial property to rent out, should you consider buying or building a co-living property? We’ll share some information about why “we living” properties are a smart investment, along with some risks to consider before you invest in your own co-living property.

Why Co-Living Properties Are A Good Idea

More Units Per Square Foot

Co-living spaces typically feature smaller units. Because of the focus on shared common areas, builders can design individual living rooms smaller in each unit. Additionally, the co-living concept appeals to many young, single professionals who will choose to rent a studio or one-bedroom apartment to minimize expenses. When units are smaller, developers can build more units into each co-living property, which will generate more income for the commercial real estate owner.

Fewer Appliances, Cheaper Upkeep

The “we living” concept involves providing more communal features and amenities, so fewer appliances are needed in each unit. A microwave, small cooktop and fridge may be more than enough for a resident who can also use the large, well-equipped communal kitchen down the hall. Additionally, a community laundry room prevents the need for a washer and dryer in each unit.

Co-Living As A Growing Commercial Real Estate Trend

The “we living” concept is new and novel, but we are seeing a growing urban trend that is continuing to spread. Owning a co-living property is being on the leading edge of the trend, and apartment buildings offering this living concept will be seen as unique and attractive, especially in unreached markets.

Risks of “We Living” Properties

More Bathrooms, More PlumbingThe flipside of increased earning potential in a building with many units is the additional cost of plumbing installation and maintenance. With more units, there will be more bathrooms to maintain, and potentially more maintenance technicians on staff to address issues promptly.

Steeper Upfront Costs

“We Living” is advertised as a move-in ready space for tenants, and units are expected to be fully furnished and tastefully decorated. Purchasing furniture and decor for every unit will start to add up. And with residents looking for more amenities, you’ll need to invest in hiring housekeeping staff, event planners and other customer service staff.

Higher Potential Vacancy Rate and Turnover

Forgoing the traditional year-long lease means accepting higher turnover and vacancy rates. However, the potential of renting vacant units by the night means bringing in income with a unit that would otherwise not make you any money.

Not Yet Popular in All Cities

The co-living trend is mainly an urban phenomenon at the moment, so introducing the concept in smaller cities is riskier. However, we see this trend continuing to grow throughout the coming years, and it may be wise to adopt the concept early, in order to enter potential markets without competition.

Should You Own a Co-Living Property?

If you’re interested in buying commercial property to rent out, it’s worth looking into the “we living” concept. As you consider the pros and cons of owning a co-living property, reach out to Jared Husmann with any questions you have. Call 515-334-4900 or contact us today to learn more about our commercial real estate opportunities.

Learn More About This Commercial Real Estate Trend in Our “We Living” Series:

“We Living” is The New Commercial Real Estate Trend to Attract Millennials

Introducing the biggest up-and-coming commercial real estate trends: “we living” apartment buildings and co-living properties! The “we living” housing concept is a growing trend in big cities like Washington D.C. and New York City.

What is “We Living”?

The “we living” concept began in 2010 with the genesis of companies like WeWork and the popularization of co-working spaces. In 2016, WeWork launched WeLive, an apartment building with the same approach as a co-working space. At WeLive’s co-living properties, residents rent fully furnished and decorated apartments and enjoy dorm-style features like common areas and shared laundry facilities. But they also provide  extra amenities, such as game rooms, hot tubs, cleaning services and happy hours with free drinks.

The amenities are a nice perk, but “we living” apartment buildings are distinct from traditional housing mainly because they are designed to intentionally foster community. They feature shared spaces and opportunities for tenants to meet and connect with their neighbors. This co-living trend has not yet taken root in the midwest, but it has the potential to become very popular and very lucrative among the commercial real estate industry. Learn more about the concept to figure out if it might be a profitable real estate investment for you.

What makes “we living” the next big commercial real estate trend?

Co-living is still a novelty, and it is relatively unheard of in the midwest. We will continue to see more co-living properties pop up as the “we living” trend grows. Below are a  few key features that make the “we living” concept distinct from traditional apartment rental properties.

More Community

You’re stepping into instant community when you move into a “we living” property. These apartment buildings encourage you to mingle with your neighbors by providing comfortable common spaces and by hosting social events. The WeLive website shares, “Our mission is to transform the rigid and isolating housing model of yesterday into a flexible and community-driven experience for today.”

Responsive Staff

Anyone who has lived in a traditional apartment complex is probably used to waiting days for a property manager or maintenance technician to respond to requests and service tickets. “We living” properties advertise full-service concierge and housekeeping staff, promising prompt and exemplary customer service.

Classes & Events

Co-living properties schedule official events for members and use systems like chat threads and message boards to facilitate residents arranging their own social events. Some examples of classes and events held at co-living properties include fitness classes, happy hours, book clubs, cooking classes and crafting groups.

Flexible Leases

“We living” properties do not lock you into a traditional year-long lease. In fact, some allow short-term stays, as little as one night or one week. One company, Common, advertises seamless lease transfers between multiple properties in cities like Los Angeles, New York City, Chicago and Seattle. Imagine the ease of relocating without the hassle of apartment hunting in a new city.

Why Does Co-Living Appeal to Millennials?

Society as a whole is less concerned about collecting material possessions and more interested in travel and experiences. This is especially true with millennials. Co-living options encourage the cultural shift toward minimalism by providing fully-furnished and decorated apartments with flexible leases that allow for the “digital nomad” lifestyle popular among millennials. Millennials also crave novelty, excitement and opportunities to connect with one another. Young people are finding it increasingly difficult to make friends after college, and co-living spaces provide built-in opportunities to meet new people.

The co-living concept appeals to young adults who are seeking a similar, but elevated, dorm-style living experience after college. We living offers more privacy and more amenities than a dorm while providing the same type of convenient social space.

The idea of sharing space and socializing with neighbors may seem unappealing, but the co-living concept does not imply sharing your entire living space with strangers. Units in “we living” buildings are private, with individual bedrooms and bathrooms just like a typical apartment unit. The difference is in the common areas and events, which are available to encourage socializing but are always optional for residents.

Learn More About Commercial Real Estate Trends

We’re always doing our research on different things going on in the commercial housing markets, and you can count on us to stay on top of the latest multifamily property trends. Reach out to Jared Husmann at 515-334-4900 if you are curious about commercial property investment opportunities.

Find Out More About Co-Living Properties in Our “We Living” Series: