Common To Open 1,100 Co-Living Units In LA By End Of The Year
“Los Angeles is a top priority market for Common,” Common Senior Managing Director of Real Estate Amalia Paliobeis said in a statement. “Being able to give our real estate partners high NOI while simultaneously creating cheaper rent for residents is a win-win for us.”
The company, which bills itself as designing, leasing and managing multifamily properties, will be expanding its management of both traditional apartments and co-living units, often in the same building.
Though in other markets Common has been taking over units from other co-living and management operators, the majority of the units here are spread across nine ground-up projects where Common has been involved since the early stages, Paliobeis told Bisnow. One of those projects, Common Paramount, opened this month, bringing 87 co-living units and six traditional apartments to the market. The ground-up project was a partnership between Common and Wiseman Residential.
The minority of the units are in buildings where Common is taking over from another operator. One of those few takeovers, a Hollywood building called 5800 Harold owned by Tanner & White Properties, opened last month and features 53 traditional apartments and nine co-living units, which Common considers individual units though they share communal spaces with other bedrooms.
Paliobeis said that the advantage for the renter is that the co-living units are roughly a 20% discount from a traditional studio. Because co-living unit rents are all-inclusive — including utilities and Wi-Fi, for example — and the units come furnished, the savings are potentially even more than 20%, Paliobeis said. At 5800 Harold, the co-living bedrooms rent for about $1.5K. At Common Paramount, which is also in Hollywood, the co-living bedrooms start at about $1.1K.
"It’s really hard to find that in a brand-new building," Paliobeis said of the price point for the co-living units.
Trying to find a traditional studio unit that rents for $1.1K or even $1.5K in a new building without co-living would indeed be challenging, if not impossible. Median rent for studios in Downtown LA, for example, which has seen a steady stream of new multifamily units come online in the past two years, is currently about $1.9K a month, according to apartment listing site Zumper. At the Common-managed 5800 Harold, traditional studios start at $2K per month. Traditional one-bedrooms at Common Paramount start at just over $2.2K.
Of the entire 1,125-unit pipeline that’s coming online before year’s end, about two-thirds are co-living units and about one-third are traditional apartments. Some mix both types of residential units, and Common also has some buildings that are 100% co-living and others that are 100% traditional apartments.
Though co-living companies experienced struggles with rent collection and leasing space during the coronavirus pandemic like traditional multifamily owners did, Common’s LA properties are doing well. Across Common’s three LA properties that opened in 2019 and 2020, the occupancy rate is over 94%, the company said. Paliobeis said that generally there haven’t been any changes to the way the units are designed as a result of the pandemic.
“We’re continuing to evaluate space and how it’s being used, but so far there have been no dramatic changes in how we are designing [that space],” Paliobeis said. The one example she did give was of co-living residents working from home more and the increasing desire in some cases for furnishing desks as part of the co-living bedrooms as a result of that.
Common Beverly, set to open later this month in Hancock Park with 90 co-living units and one traditional apartment, is the second in a series of seven projects between Common and Category Co. (formerly Proper Development) that were announced in 2019, when Common opened its first building, Common Melrose in Hollywood. Paliobeis said all those projects are still in the works.
Common has roughly 5,000 units under management now nationwide but expects to have more than 8,000 under management by the middle of this year.
In addition to its growth spurt this year, Common also announced plans to open 1,800 more units in LA by 2024 — all in new, ground-up projects across the city and all featuring a unit mix of traditional apartments and co-living bedroom units.
With the summer coming and the movement of Los Angeles County into the least restrictive yellow tier of Covid public health restrictions, Paliobeis said she anticipates a return to the city and that Common had already seen a "big jump" in demand and interest from prospective renters.
"We're really bullish on LA," Paliobeis said.