A leading European coliving developer plans to invest $300 million in new projects in major U.S. cities over the next three years, seeking to add 1,300 new units across the country.
The goal is to eventually become the WeWork of the industry, Gunther Schmidt, CEO and founder of Quarters, told Curbed. “Whomever wins the global race for coliving will win the war in the United States.”
Quarters, which launched in Berlin six years ago, before the private bedroom, shared common space living concept really took hold, currently houses 1,850 members in spaces across Europe.
The new $300 million expansion deal between the company’s parent, the Medici Living Group and W5 Group, comes on the heels of a $1.1 billion fundraising round with Corestate Capital aimed at opening as many as 35 new facilities across Europe.
The company already operates coliving spaces in Chicago and New York City, but will significantly expand its footprint over the next three years, targeting urban areas with lots of millennials and startup activity. Quarters is looking at cities such as Philadelphia, Seattle, Boston, Denver, Los Angeles, and San Diego, where it is planning to open residential projects that can house between 100 and 300 members.New spaces in San Francisco and New York would be even bigger, housing up to 500 members.
Other coliving firms have recently ramped up their ambitions, going beyond smaller group homes—usually adaptive reuse projects in residential neighborhoods—to focus on high-rises. Starcity plans to develop a pair of large, multi-story buildings in the Bay Area, including an 800-unit project in San Jose.
Schmidt says the company’s “asset-light strategy”—managing instead of owning, and signing 10-year leases, with two 5-year options, to be flexible—as well as significant funding, will allow it to talk with “every developer” as it scouts new locations.
This is a great time to invest, even with fears of a potential recession, Schmidt believes. A downturn would only increase demand for coliving, akin to how WeWork grew during the tail end of the last recession.
“We’re building the most affordable, standardized product on the market,” he says.