What’s up in the real estate market

1015

By: Jeff Perlman Editor in Chief
Keep an eye on co-living
We love to look at real estate trends and we just spotted a new one to keep your eye on: adult dorms.
If the word “dorm” conjures images of keg parties, all-nighters and the song “Sister Christian” blasting through the hallways—guess again. Think co-living and community, instead of cramped institutional spaces typical at universities.
The pioneers of the “co-living” trend are some of the entrepreneurs who made co-working concepts trendy in recent years. Co-working enables individuals and small companies to share space—usually well designed at affordable rates in hot locations. Delray’s Congress Avenue features a Regus co-working space in what was formerly known as the Arbors Buildings. Once home to IBM back in the 80s, developer-investors Grover Corlew have re-positioned the buildings and are considered key players in the hoped for renaissance of Congress Avenue. Regus is one of the prominent firms in the co-working movement, offering tenants community, shared space, office machines and the all-important coffee bar to boost productivity.
In Boca Raton, Quest Workspaces and Cendyn, both on North Federal Highway, are successful examples of creative co-working environments. Nationally, WeWork is arguably the big player in the co-working space. The company has a presence in Miami.
The next phase of the trend, according to some real estate experts and venture capitalists is co-living.
Venture capitalists are turning to “co-living”—i.e. adult dorms—as an answer to the housing crunch in major U.S. cities. But the trend may also extend to smaller cities experiencing affordability issues—something Boca Raton and Delray Beach are familiar with.
WeWork and a handful of smaller startups are experimenting with the new type of housing, which combines micro-units with shared kitchens, lounges and a general sense of community.
The emerging trend has attracted VC’s and financial firms including Fidelity Investments who believe the concept will appeal to millennials who wish to live in hot spots, but can’t afford to rent or buy real estate in downtown locations.
Rents in downtown Delray can range from $2,500 a month to over $5,000. Rents in east Boca are also proving to be out of the reach of young professionals.
WeWork unveiled its co-living concept “WeLive” in Manhattan and Washington D.C. earlier this year and plans to have 70 locations with 30,000 residents by 2018. The company has raised almost $1.5 billion in venture capital funding and investors expect residential revenue to be nearly 20 percent of the business within two years.
While some co-living spaces are designed around common interests and values—artists, entrepreneurs, green living aficionados– not all spaces are designed around a common set of interests and most importantly not all co-living is sober living, a local hot button.
It will be interesting to see if the trend takes root in Boca and Delray and whether local zoning codes would permit these types of arrangements.