Co-Living Leader Common Launching In 4 New Cities With $300M Investment
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UPDATE, APRIL 3, 2 P.M. ET: The story has been updated to reflect the details of ownership behind Domos.
The nation's largest co-living provider is expanding its presence to four new cities with $300M in new projects.
Common is planning new multifamily projects in Philadelphia, Atlanta, Pittsburgh and San Diego, expanding beyond the six markets where the company already operates. Common is partnering with different local developers in each city to spearhead these new projects.
Co-living is the new kid in the larger multifamily industry, with residents who accept smaller spaces with less privacy in exchange for lower rents, more convenience and a sense of community. For Common communities, each renter pays for a private bedroom and bathroom — utilities, furniture and services included — while sharing a living room and kitchen.
Common targets young singles and childless renters with average incomes who want to live in urban environments, but may be priced out by skyrocketing rents.
In Atlanta, Common is targeting the West Midtown, Reynoldstown and Grant Park neighborhoods in the city, CEO Brad Hargreaves said. Common is partnering with the Atlanta firm Domos — a joint venture between Civitas Communities and Real Estate Asset Partners — for $75M in new developments, encompassing 600 beds in up to six projects.
“Co-living is still in a very nascent place outside of the coasts, but there's still an affordability crisis,” Hargreaves said. “We've been excited about co-living in Atlanta for more than a year.”
In Metro Atlanta, the birth of co-living came in 2016 with one local company named The Guild, which now operates two communities in the city.
In Philadelphia, Common is partnering with Elk Street Management on $100M in new co-living developments encompassing 1,000 beds, including the 72-bed Common Frankford, a new community in the Fishtown neighborhood that will deliver in 2020.
On average, Hargreaves said Common rents are 20% lower than market-rate rents for a comparable studio apartment unit.
While construction costs are going to be the same for Common as any other apartment developer, the firm saves costs on layout, especially since residents share a kitchen. Common has one kitchen for every 1,200 SF versus a typical new apartment building, which averages a kitchen for every 600 SF, Hargreaves said.
“Kitchens by far are the most expensive things to build,” Hargreaves said.
In the City of Brotherly Love, apartment rents average $1,576/month, according to RentCafé. Common plans to have rents at its Fishtown project starting at $995/month.
“With rent starting under $1K, our partnership with Common will have an incredible impact offsetting the pressure of rising rent in the community while still providing high-quality housing at an affordable price point in one of the city’s most desirable neighborhoods,” Elk Street partner Paul Horos said in a statement.
Common's first project opened in New York City in 2015. Since then, the company has expanded into Chicago, San Francisco, Oakland, Los Angeles, Seattle and Washington, D.C., with 24 projects. It also recently announced plans to expand into New Orleans and Newark, New Jersey.