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Co-living and micro units are changing the way that people are living. In particular, these apartment styles are providing quality middle-income housing options in urban markets. Even better, they are generating phenomenal net operating income for investors. However, construction and lending models have yet to catch up to this new way of living. At RealShare Apartments yesterday, leaders in this niche talked about the burgeoning market on the Co-Living, Micro-Units, and Vacation Rentals: Value Opportunities in Non-Traditional Apartments. Panelists included Laurie Lustig-Bower, EVP at CBRE; Shaina Li, director of real estate at Common; Zac Shore, director of development at Panoramic Interests; Jim Wiegandt, managing director of commercial real estate banking at Banc of California; John Petrov, president at Baldwin Construction; Sebastian Rein, managing director at AddaZero.

Co-living is essentially a managed united apartment. Common, a new leader in this space, works with developers to design four or five unit apartments with common living spaces. They manage the interior units, taking care of stocking basic needs, cleaning and managing utilities to create a quality shared living space. As a result, they are generating as much as 40% NOI compared to a standard apartment building. “This isn’t an innovative concept,” said Li on the panel, explaining that people in urban markets have lived in shared spaces as a way to curb costs. “What is different is the services. We are thinking about how to making city living better when you share spaces.”

Kelsi Maree Borland

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