Co-living is having a moment. Common, the co-living startup founded by General Assembly cofounder Brad Hargreaves announced this morning that they raised $7,350,000 in Series A funding for operating costs and business growth.
While shared living arrangements are not new, a successful business model hasn’t yet emerged. Campus, a once-burgeoning co-living company with 30 locations across the country (including one in Park Slope), announced in June that it would close its doors. “[W]e were unable to make Campus into an economically viable business,” says a statement on their website.
But Common’s model is different. The company will cleverly use investor assets — Brooklyn brownstones — through a sharing model.
Partnering directly with real estate investors and developers, Common selects a building on the market and makes a financial case. Then an investor purchases the building on their behalf, leasing it back to Common on a long-term, 10 to 15 year contract.
“Our relationships with our capital partners and investors take some of the short term pressure off of Common and allow us to be a bit more creative and innovative with our use of space,” Hargreaves told Brownstoner. “Taking the entire building means we’re able to see better returns.”
But there’s still risk. The premiums paid for Brooklyn brownstones could make the economics of co-living break down.
While Hargreaves wouldn’t divulge the precise addresses of his first Common locations, he indicated to Brownstoner that there would be more than one Brooklyn co-living space launching in the fall, and that the company was focusing on Bed Stuy and Crown Heights — and brownstones.
Classic Brooklyn brownstones “work exceptionally well for this model of individuals living together, for creating a community,” Hargreaves told us.”Both [neighborhoods] have great access to transit, and great communities already there. We’re looking to create spaces that integrate and interact with their neighborhoods.”
Common offers an alternative housing option to those who want to live in a Brooklyn brownstone — without subletting, finding roommates on Craigslist, or signing a year lease.
Living at Common will cost somewhere between $1,000 and $2,000 a month, including utilities, management fees, WiFi, cleaning service, and supplies like coffee, tea, and paper towels.
Hargreaves described how in one building, they are creating an open community space on the lowest floor with a giant dining table so that occupants can all have dinner together. He continued, “We’re using existing configurations as best as we can, with slight modifications to get people interacting.”
When asked why Common was starting in Brooklyn, Hargreaves said that the borough had everything they were looking for: the right mix of affordability, transit, and inventory.
Perhaps Brooklyn is its own kind of Silicon Valley. Not an incubator for technology, necessarily, but an incubator for something more akin to lifestyle: live in a Common house in Crown Heights, work in a WeWork office in Dumbo Heights, take an Uber or a Car2Go out to an evening’s adventure in Williamsburg — a proving ground for the future?
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