Top 7 takeaways — Susan Tjarksen on coliving and its bigger impact on other residential living segments
In our latest Rooftalks podcast episode, we invited Susan Tjarksen, Managing Director at Cushman&Wakefield to speak with us about recent trends in the coliving industry, how she managed to rally an organization like Cushman&Wakefield behind the coliving opportunity, and the bigger impact that coliving has on the other residential living segments.
Don’t have time to listen to the whole episode?
Read through the main takeaways below — or sign up at Obeyo.com/rooftalks to receive all future episodes right into your inbox.
Top 1 — There has been a clear shift in the mindset of the developers
In the past, developers built whatever they knew they could easily get funding for. Today, they’ve started listening to what the residents want — developers now understood that residential apartments are essentially just another consumer brand; no different than buying another shirt. And they understand that within their buildings they need to create a sense of community as this is what their consumer surveys have shown!
Top 2 — The world needs new residential models
Over the recent years, rent hikes have steadily outpaced the increases in income, making renting more and more unaffordable. To solve this challenge, there is an urgent requirement to make alternative renting models like coliving and other affordable urban living models a global phenomenon.
Top 3 — Coliving is a resilient business preposition
Throughout the last couple of years, coliving has outperformed class A multifamily residences — despite the pandemic. It turns out that in times of pandemic, one just doesn't want to live in social isolation. As consequence, residents gladly sacrifice the size of their personal space, as their entire building becomes their home and not just the space where their bed is.
Top 4 — Coliving has brought a lot more tech interest into residential real estate.
Driven by the pandemic and the change in resident needs, traditional operators have caught on to the tech side with remote viewings and virtual tours, one-touch living, etc. — all of this had been unheard of in the multifamily space prior to the pandemic. The coliving sector has innovated how to leverage technology for a better living and operating experience, and now traditional multifamily players are learning fast from the early innovators, too. The same is true for how to use social media to market their prepositions to the younger generations effectively.
Top 5 — The investor landscape for coliving is changing
The early coliving expansion was driven by VC money. However, VCs typically expect higher returns which is difficult to achieve with a real estate expansion play and today, real estate money is replacing VC money across many coliving platforms as real estate money accepts a way lower return. The difficulty in meeting the expectations of the early VC investors further accelerated the consolidation of the coliving market we have seen in the last couple of months. What would have happened over a 5-year period in the past now happened over a 10-month period.
Top 6 — Profitability of coliving segment
Profitability is driven by four factors: 1. By densifying the asset, you automatically increase the returns. 2. A better living experience helps drive the duration of stay upwards from the 63% standard renewal rate. And if you can grow that to just 65–67% through better services, this is a real impact on the bottom line. 3. Longer stays, and a higher sense of ownership lead to less maintenance wear and tear. 4. By creating additional data points on exit valuations, additional liquidity is generated making an exit at better terms more likely. But of course, the real impact of coliving goes beyond that by revitalising urbanization, aiding a more sustainable lifestyle, and a positive impact on mental health and well-being.
Top 7 — Future
We will see more blended buildings i.e. a combination of traditional multifamily and shared living units. Also, a lot of bigger companies are validating the coliving space, bringing a lot of credibility and a lift in valuations. Both open up different funding options as bigger investment amounts can be deployed. In 5 years' time having a hassle-free all-inclusive and one-touch living experience will be as much an expectation and a standard as running water.
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- About Rooftalks — the podcast: Spirited conversation intersection of community, technology, and shared living with thought leaders and movers and shakers in the shared living space: sign-up at obeyo.com/rooftalks.
- About Michael: Michael is co-founder and CEO at Obeyo. Passionate about connecting people, he loves to explore ideas at the intersection between community, shared-living, and technology. Feel free to connect with him on LinkedIn.
- About Obeyo: Obeyo is the first all-in-one operating system and community app for residential living built around the learnings from 100+ shared living operators.