The Rise of Co-Living & What it Means for Traditional Real Estate

Between WeLive, Ollie, Webster Apartments, Common, Quarters and more, co-living buildings are picking up speed in the city. With approximately 650 of these residential units in Manhattan alone and even more in Brooklyn and Queens, landlords attempting to lease standard two or three-bedroom shared apartments are facing a new obstacle.

Co-living buildings appeal mainly to millennials and particularly those that don’t want to commit to a yearlong lease. At WeLive Wall Street, for example, tenants can stay for as little as one night or as long as an entire year. These types of flexible lease arrangements appeal to many people who aren’t sure exactly how long they will be in the city.

Often, the cost of rent in a co-living building is fairly similar to what one would pay for a room in a shared apartment. However, the appeal of co-living lies in the community atmosphere and the building amenities. Although residents in a co-living space typically have to share a bathroom, there are often communal lounges, game rooms, and workspaces. Some buildings even serve two meals per day and feature services such as regular housekeeping free of charge.

Although potential tenants in a co-living building often have to undergo a financial check, the process is still far less extensive than in a shared apartment situation which can involve guarantors and loads of paperwork. In years past, these shared two and three-bedroom apartments were a number one cash cow for many of the city’s brokers. The rise of co-living means that there are certainly not as many people competing for these shared apartments at any given time. However, co-living arrangements may be an attractive option for those who need somewhere to stay while they take their time finding a more permanent apartment instead of rushing to sign a lease.

Thoughts by:
Adam Frisch,
Managing Principal