San Francisco-based Starcity has acquired co-living rival Ollie’s technology, assets, and management contracts reported Commercial Observer. The acquisition will expand Starcity’s portfolio to 1,500 units, mostly located in the U.S., with 3,000 units in development.
The acquisition provides Starcity with a presence on the East Coast. “They’re very aligned in how they built communities and how we’re doing it,” Starcity Founder and CEO Jon Dishotsky said. “We’re very strong on the West Coast, we’re growing in Europe, but don’t have anything on the East Coast.”
As important, it gives Starcity access to Ollie’s technology, including its roommate matching program. “They have tech that matched our roadmap,” Dishotsky said, “but we focused on other things first.”
Both companies announced expansion plans in May with Starcity entering the European market through a joint venture with Barcelona Homes, while Ollie expanded into California. Unfortunately, Ollie became another casualty of the pandemic with occupancy down significantly in July according to Business Insider.
Launched in 2013, Ollie was one of the early entrants in the co-living sector with a micro-unit development in Manhattan’s Kips Bay, and then expanded to Los Angeles, Pittsburgh, and Boston.
In January 2020, Ollie founders Chris Bledsoe, CEO, and Andrew Bledsoe, COO, left the company in a management shake-up. Board member Gregg Christiansen stepped in as president.
The pandemic has caused some concerns about the long-term outlook of co-living as an asset class, but Dishotsky says demand is back to pre-COVID levels after a sharp drop in the second quarter.
Dishotsky is bullish about co-living, noting that it offers renters great value because “it’s priced at a discount to new construction studios, and offers a better experience than a traditional rental from a mom-and-pop landlord… thus offering great returns and more affordable housing simultaneously.”
Starcity has raised a total of $50 million since launching in 2016. It raised a $30 million Series B round in April from investors Peak State Ventures, Reshape, and Y Combinator.
Key Ollie executives, including president Gregg Christiansen, will join Starcity.
photo credit: ollie