Coliving company Common announced a significant expansion this morning, with a plan to grow from housing 1,000 to 10,000 residents in the next few years. The company’s flurry of new deals, including buildings in the new-to-Common markets of Denver, Boston, Baltimore, and Portland, Oregon, underscores the continued growth of this new category of residential real estate—smaller, furnished private rooms, shared common space, and flexible, month-by-month lease terms—amid widespread affordability challenges for many renters.
“It’s an indicator of our growth and the maturation of the space,” says Brad Hargreaves, the company’s founder and CEO. “You’re going to see people approach this from a few directions. We’re the first to reach this scale, but we won’t be the last.”
Common now has a pipeline of operational or under-construction projects in 19 cities, which would vault it ahead of competitors such as Hubhaus, which operates 1,400 beds, Starcity, which will have 500 beds operational by the end of the year and has an additional pipeline of 5,200 beds, and Bungalow, which currently operates 2,800 beds nationwide, and has plans to eventually expand to 10,000 beds. This new announcement that the company will expand by a factor of 10 comes after a year where other coliving companies have also announced new, larger projects, including Starcity’s 800-unit building going up in San Jose, California.
When Common launched in 2015 in Brooklyn, the company focused on smaller projects for 30-40 residents, mostly in renovated apartment buildings. Hargreaves says that while coliving often gets conflated with coworking, it’s a very different market that is based on “fundamental demographic trends,” namely wages not keeping up with rent growth, young adults delaying marriage, people staying in cities longer, and people looking for community.
Those demographic trends have changed the nature of the buildings Common designs. Today, 44 percent of its projects are ground-up construction, not renovations, and 23 percent are so-called “blended” projects, mixing coliving and traditional studio and one-bedroom units. These new buildings are also bigger—the company currently plans to open a 600-unit building in Miami.
Rents in Common buildings vary by market; members living in Crown Heights, Brooklyn may pay $1,495 per month, prices in Los Angeles start at $1,550, and tenants in Chicago may pay $975 a month for a spot in the Addams project in the Pilsen neighborhood. The company plans to change somewhere “in the low thousands” for space in the new Baltimore building.
Hargreaves says Common’s competition has also radically changed in the last few years. Initially, the company was up against other startups in the space, such as Ollie and Starcity. Now, as institutional investors and more established real estate companies like Greystar and Property Markets Group (under its PMGx sub-brand) create and build their own coliving spaces, there’s more competition for capital and resources.
Common partners with developers, who provide the funding for a new building while Common operates and manages the property. The last year of coliving growth has suggested more institutional investors are beginning to take interest.
As the company scales up, Hargreaves says the selling point remains flexibility, and most importantly, affordability. He says Common is already receiving an average of 15,000 inbound requests for space in their buildings every month.
“We’ve taken a pretty hard line in not participating in the amenities arms race,” he says. “The best amenity is affordability.”
Common’s expansion won’t end with this new round of deals. Hargreaves expects to announce a new project focused on the Kin brand—a pilot project with developer Tishman Speyer focused on coliving for families—sometime in the next few months.
“It’s a challenge to build projects that are native to the cities where they’re located and cna still be authentic,” he says. “We’re not going to build a Brooklyn brownstone in Hollywood, that’s not what people want.”