Luxury hotel? No, it’s co-living
Far from a shared college dorm room, modern co-living satisfies millennials’ need for the experiential.
Would you be willing to sacrifice square footage for a higher quality of life? Co-Living, the newest trend and buzz word is the answer to that question. Far from a shared college dorm room, modern co-living satisfies millennials’ need for the experiential. Co-living developments feature five-star hotel services such as room cleaning, weekly linen and towel changes, and luxury bath products. They host events such as community garden classes, seminars on natural tie-dyeing, and conversations with local influencers. What the tenant may lose in square footage is completely redeemed in service, comfort, and amenities. I sat down with two titans in the space, Chris Bledsoe of Ollie and Reza Merchant of The Collective. Both have achieved outstanding success, with two very different approaches.
Chris Bledsoe was a rising star on Wall Street in the early 2000’s, working for premier firms such as JP Morgan, Citadel, and Lehman Brothers. When he noticed that his brother and most of his friends were renting one-bedroom apartments and putting up a wall in the living room to rent as a second bedroom, the lightbulb went off. His idea was to densify living space but wildly exceed quality of life expectations. Seven years and 400 meetings later, Chris’s vision is finally reality at Alta by Ollie, a 422-bed new construction in Long Island City. Chris brings a high-level, macroeconomic method to the housing sector. Rather than providing another cookie-cutter rental building, Chris sees the future of apartments as a consumer product rather than a commoditized asset. Ollie differentiates itself from a typical rental unit by providing a far superior living experience and maximizing units per floor.
Reza Merchant of The Collective is part real estate genius and part cultural visionary. The conversation with Reza begins with a mantra you will see all over their website: “human connection.” He explains that millennials want to feel connected to their work and to their living situation; that our generation is more likely to save money for a trip to Burning Man than on furniture. Since mankind has walked this earth, Reza says, human connectivity has been the most important thing in life. “Experience is what grasps us and gives us ultimate fulfillment”, he continues.
Reza’s “a-ha” moment came when he was at the London School of Economics and noticed that students, having no income, were forced to live in illegally converted units in less desirable neighborhoods. Only 9 years since graduating from college, he has deployed over $400 million in capital. He completed a 550-bed new development in London called The Collective Old Oak and his group recently spent $54.2 million for the development site at 555 Broadway at the intersection of Williamsburg and Bushwick in Brooklyn. Despite his success, Reza remains rooted in his mission to create a better place for people to live and to bring people together. Co-living is here to stay. Reza and Chris have proved that smaller apartments can mean big upside. The unique, experiential approach to housing is a welcome change in a city like New York that has a homogenized rental unit inventory. Expect to see more co-living development and more projects including the idea in their business plan.
― Best Stories for you ―
― About the Author ―
Director in the Capital Markets division of Cushman and Wakefield
Will Conrad is focusing on Middle Market Investment Sales in the Midtown and Upper East Side neighborhoods of Manhattan. His expertise spans all asset classes, including multi-family, mixed-use, office, retail, and development sites.