Will Coliving Survive?

In the wake of COVID-19, the landscape of so many businesses has permanently changed. 

Surprisingly, overall, the coliving sector has performed well through this very unique time in our world. I get the chance to speak to the large operators around the world and their stats and numbers through this rough time actually out-performed regular multi-family residential both in occupancy and delinquency rates in certain regions. 

According to the National Multifamily Housing Council, 80.2% of renters nationwide paid rent in May. Yet throughout the Common living portfolio here in the U.S., their delinquency rate was significantly lower: 93.5%. 

Now, coliving is quite broad, so let’s break it into two separate categories: 

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Long-term and Short-term ‍

The long-term silo of coliving with a minimum stay of 6 months or more is still holding strong, in many ways because it is not intuitively tied to the travel industry and does not have to depend on short stays to bolster occupancy.

Short-term and international coliving concepts, on the other hand, are having a harder time navigating these challenging times. With a larger proportion of their business rooted in travel, they are seeing big changes right now. Many operators are slashing prices in hopes of recouping lost or wary residents. 

Surviving (and even thriving) is possible - but only for those who adapt. Coliving has already been discussed as a counter-cyclical sector of real estate, meaning it should perform BETTER during a down-turn due to the fact that people will be looking for ways to save money. 

These events have put some stress on coliving companies’ community-oriented spaces when humans cannot congregate the way they used to. Shared kitchens, common rooms, and bathrooms have to change their density and safety measures. On the flip side, businesses that offer a greater degree of safety while maintaining social connection during this time have shone brighter. With all this considered, keep in mind that coliving overall has fared very well safety- wise. There have been no jarring headlines such as “COVID-19 Runs Rampant Through Coliving X Brand”, because cases in coliving spaces have been low to none. Much of this can be chalked down to how coliving businesses tend to rely on tight systems. 

Coliving during this time has been able to use technology to make it easier for residents to stay inside in private spaces instead of having to leave in search of the things they need which would risk infecting themselves or others. 

In addition, coliving companies with frequent cleaning and onsite services embedded in the spaces have helped to prevent potential spread by providing amenities in-house instead of requiring residents to venture out. By operating as more self-contained than a standard living space, coliving helps to create more of a closed system with far less accidental introduction of infection. In this sense, the concepts that meet these criteria will not only survive but come out stronger than ever and take more market share. 

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How Will It Be Forever Changed? 

The coliving companies that will survive and pull even further ahead are those that have the resources to adapt. These resources may come down to capital, or simply ingenuity. Namely, businesses with the digital tools to streamline both costs and community, with the capacity to run their business and foster relationships remotely, are key. 

Just look at The Collective: they are stronger than ever during this time, and why? Because their systems are automated. Their community has a strong digital foundation, which has allowed residents to retain access to the social bonds that make coliving special. Also, they already had unique programming, events, and discussions in place so they just easily moved them online - Cryptocurrency Masterclass, anyone? 

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What’s On The Horizon? 

The selling point of coliving has shifted now to having access to more built-in amenities, and the spaces that can provide these are the ones that succeed. Those with amenities that make distance easier and still provide a sense of community and value amidst the distance will gather support. This can mean virtual group exercise classes, online social events, delivery discounts, and all the tools that make coliving feel intact despite the distance. As a result, we may see smaller, more outdated concepts with no tech or adaptive capacities suffering and phasing out. The companies that were able to breeze through in the past without optimised business practices are not able to do so any longer.

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Mega-brands On The Rise 

As is the case with all industries, coliving has experienced a massive growth stage in the past few years and now we are hitting a period of refinement. It’s like the Big Bang, and now the dust is settling. Less targeted and serious businesses will fall away and give rise to more resilient, niched concepts. This means we’ll see expertise in brands and spaces that cater closely to families, senior living, students and other specific market needs. 

With the cementing of more efficient protocols to maintain health, safety, and community in shared living environments, we are already seeing the growth of those who do it best. Mega-brands that have mastered the ability to streamline their systems and community are growing rapidly above the rest. 

I also anticipate some of the larger brands taking over distressed hotels in the near future as long as they can properly navigate the regulation and zoning requirements. 

‍One thing is certain: coliving will come out even better on the other side of this. Innovation is the key to growth. All we can do is embrace this new frontier and the tactics that make it possible to continue fostering community and we just witnessed how the ‘connection + community’ equation is more important than ever!