March 20, 2019
A co-living company that has been offering dormitory-like accommodations to single 20-somethings now has a new customer base in mind: families.
New York City-based Common, which rents out fully furnished private bedrooms in shared, serviced apartments—complete with a shared and furnished living area, kitchen, and bathroom(s), and free on-site laundry; as well as a once-a-week professional cleaning team—is teaming with global real-estate developer Tishman Speyer to launch this new product on March 19, The Wall Street Journal reports.
It’s a grown-up concept designed to meet the needs of young and expanding family units. Under the new brand Kin, buildings will feature playrooms, family-size units, and on-demand childcare through an internal mobile app that also helps connect families looking to share nannies and babysitters.
Common and Tishman Speyer are testing out those offerings at an existing luxury project, Jackson Park in Long Island City, with plans to announce new developments in other locales in the coming months, the Journal reports.
The partners see this as an opportunity to help address a shortage of family-size apartments in many major U.S. cities, where developers have overwhelmingly built studios and one-bedrooms targeted to single 20-somethings.
“People are choosing to raise families in big cities more than ever,” said Rob Speyer, president and chief executive at Tishman Speyer. “It’s very difficult to find housing that’s tailored to that.”
Common pioneered the co-living concept, but since then it has become a crowded space with a handful of well-funded competitors. All are racing to see who can most quickly overcome hurdles—such as finding developers and banks willing to gamble on the unconventional layouts, and finding a way to shrink floor plans without alienating customers.
Brad Hargreaves, founder and chief executive at Common, said the idea for the product grew out of his own experience trying to find child care in the city when his son was born in 2015.
“When [my first son] was about to be born we started looking for child-care options, and we really struggled to find anything that was affordable and high-quality,” he said.
The Kin venture also provides a hedge for Common when its clientele are aging out of their 20s and potentially out of Common’s core product.
Some analysts have warned that co-living buildings serve a niche demographic and people are much less likely to live there when they become couples or have children.
“There is a large question from a venture-capital side about what these companies are going to look like in 10 years. When the largest cohort that is using co-living, what happens when these people grow up?” Jeffrey Berman, a general partner at Camber Creek, a real-estate-focused venture-capital firm, told the Journal in an interview.
Unlike Common’s co-living product, Kin buildings won’t require families to share kitchens and bathrooms. But Mr. Hargreaves said units will be compact to help make them more affordable, with larger common spaces to compensate.
Developers traditionally build much fewer two- or three-bedroom apartments because they are more expensive and tend to lease more slowly. In fact, the share of apartments with two or more bedrooms has declined to just over 40% since 2014, from about 55% from 2000 to 2013. Nearly 60% of new units constructed in the 54 largest metros since 2014 have been studio or one-bedroom apartments, according to CoStar, up from about 45% from 2000 to 2013.
Hargreaves told the news outlet that he is confident that families aren’t leaving the city by choice, but because of limited child-care and housing options. “One of the biggest things [families] fear is being forced out of the city into the suburbs,” he said.
Research contact: @hicommon