‘Co-living’ now part of the shared economy.
YOU’LL SHARE THIS APARTMENT WITH A STRANGER — BUT DON’T DARE CALL IT A DORM.
The first step into a posh new apartment building near Los Angeles’ Marina del Rey feels like a mistake. There’s no lobby — instead the door opens to a lounge and kitchen.
The idea is to encourage mingling, which is part of the appeal of a building where tenants have their own bedrooms but share common areas with people they don’t know.
But this is not your typical roommate situation. The bedrooms are spacious, the living rooms are furnished — and the residents are often selected by the landlord.
Welcome to “co-living” in a time of sky-high rents.
The shared economy has transformed how we get around, how we travel, who sits next to us at the office and, now, with whom we share our private spaces.
Real estate developers such as California Landmark Group are pioneering a new way of living by primarily catering to young professionals and creative types who enjoy luxury digs but can’t swing the rent in desirable neighborhoods such as the Marina.
And while stretching out on a sofa with a stranger may strike many as unusual, it is not much of a leap to people already comfortable with Uber and Airbnb, said Ken Kahan, founder of the Los Angeles-based development company.
“People get in other people’s cars and sleep in other people’s beds,” he said. “This is a natural expansion of the housing market in the shared economy.”
Co-living has the benefit of offering renters in search of social connection the chance to bond with new acquaintances in similar situations, but its fundamental appeal may be economic.
Typically, a co-living renter has a private bedroom and can spring for a private bathroom but shares the kitchen, living room and other communal spaces. Units are furnished — sometimes at an In- stagram-worthy level — and the rent usually includes services that aren’t covered in other apartments, such as utilities and Wi-Fi.
C1 even offers Netflix and maid services to head off squabbles over whose turn it is to vacuum the floor and scrub the sink.
Co-living complexes have grown fairly common in European cities such as Berlin, London and Dublin, Kahan said, and are now springing up in New York, Seattle, San Francisco, Los Angeles and other American urban areas. Even in relatively cheaper housing areas like Houston, co-living and co-housing interest in developing these communities is growing, with many — especially retirees and millennials — looking to save some cash by living together.
They come in different iterations. Some companies contract with landlords to refit entire buildings or carve up individual units so that a two-bedroom might fit additional tenants who squeeze into bunk beds or live in a partitioned living room.
Developers such as Kahan are taking the next step: building from the ground up and foreseeing a time when co-living is a new property category, like assisting living complexes designed to serve the growing numbers of wealthy seniors.
A portfolio of buildings in an established property class can get funded by banks, purchased by pension funds and even secur- itized in real estate investment trusts.
For now, though, co-living is still in its infancy and is considered somewhat experimental. But if the small developments emerging in trendy housing markets like Marina del Rey, Venice and Echo Park succeed, more will probably follow.
Another co-living housing developer, Anil Khera, sees a link between co-living and the upmarket student housing complexes that have sprung up around campuses in recent years. Those have formed an established new property category that is a leap beyond the spartan dormitories and cracker-box apartments of college students a generation ago.
Complexes near the University of Southern California and University of California Irvine, for instance, offer such luxuries as 24-hour fitness centers, tanning booths, billiards, barbecues and resort-style pools with cabanas. Furnished units come with granite countertops, big-screen HD television sets and ice makers.
“You have millennials who have grown up in pretty fancy purposebuilt apartments,” Khera said, and are unaccustomed to “slumming it” in old, unfurnished units once out of school.
Co-living, he said, is the next step for graduates facing steep rents in desirable urban neighborhoods. The median rent for a vacant apartment in Los Angeles, San Diego and San Francisco is one-third higher than it was in 2012. In November it hit $2,554 in Los Angeles, according to Zillow.
Khera, a former executive at global private equity real estate firm Blackstone, in 2016 founded a co-living company called Node as it became apparent that millennials valued travel, memorable events and friendships over possessions.
“The aspiration for the new generation growing up globally connected on Instagram is about experiences and connections,” he said. “That’s the stuff that’s cool.”
Promotional materials for Node’s new Echo Park outpost boast that its two 1920s-vintage bungalow court complexes are