Co-living Rentals & COVID-19
To help determine the most profitable rental mode for multifamily buildings in San Francisco by assessing the impact of COVID-19 on co-living rentals, identifying the demand and growth for co-living rentals after COVID-19 for up to three years and understanding alternative housing programs/rental modes.
- While industry experts suggest that COVID-19 has had a significant impact on America's co-living industry in the near-term, real estate trades (e.g., JLL, MillionAcres) appear to consistently predict that demand for co-living will rebound to pre-crisis levels and that co-living will continue to be an attractive option in high-density cities such as San Francisco.
- Executives from co-living companies Haven, Common and Quarters have reported significant challenges since the beginning of COVID-19, including a drop-off in occupants as well as a rise in existing tenants looking to break their leases.
- However, JLL reports that co-living communities with corporate workers and longer-term residents have fared much better during the global crises than those oriented toward more short-term residents.
- Additionally, JLL suggests that co-living operators have demonstrated success in addressing the operational challenges with "delivering social distancing strategies" during the coronavirus outbreak, as well as in meeting residents' demand for socialization by providing "digital communities."
- For example, co-living company Common has shifted to virtual events, cooking classes and trivia nights, and has also seen strong demand for its 100% virtual tours.
- Overall, JLL contends that there "does not yet appear to be a diminished appetite" for co-living by investors, while MillionAcres asserts that there is a "good chance" that co-living will return to pre-COVID-19 levels of popularity once the pandemic subsides.
- In particular, MillionAcres suggests that co-living will rebound quickly in cities including New York and San Francisco given that co-living offers the most "cost-effective option for living" in both a convenient and attractive area within these high-density cities.
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