The coronavirus has impacted real estate, rental markets and co-living companies across the globe. Many have shifted their strategies during the pandemic, but one thing seems clear — co-living’s flexibility will help the industry move forward.
The State of the Co-Living Industry
Covid-19 has shocked the co-living business model, driving a loss of revenue for many companies within the space, However, the future still looks bright. Cushman & Wakefield estimates that the co-living market could grow to a potential $550 billion dollar industry between Europe and the United States over the next ten years.
The market is growing rapidly in cities with a very high cost of living such as New York City and Los Angeles, and some companies are finding success among the uncertainty brought on by Covid-19. Starcity is a co-living startup that recently announced a funding round of $30 million for continued expansion during the crisis.
The co-living model’s inherent flexibility and agility contributes to the industry’s ability to adapt to change. Some companies have adapted by supporting digital nomads through innovative online community building.
The Collective: A Co-Living Case Study
The Collective is a co-living company with businesses in the U.S., U.K., and Germany. Forbes recently interviewed its founder and CEO Reza Merchant about how the company is staying steady through the coronavirus crisis.
At first glance, the co-living model sounds terrible during a global pandemic, as guidance from health officials often suggests social distancing and avoiding groups. Merchant shows that the exact opposite is true.
The Collective hosts virtual events for residents across its network — a common amenity provided by co-living companies. This helps create a sense of community without the need for large gatherings — something that many need at the moment.
Merchant thinks that this is going to be important for the industry moving forward. “The pandemic is going to be good for community. People are appreciating the value of connection more than ever, and will look for it in the way that they choose to live in the future,” he said.
The model’s inherent flexibility for residents is also important during the pandemic, as people look for cheaper, more flexible living options that can adapt to their quickly-changing financial situation. Co-living rental contracts are often much more flexible than traditional rental options.
The co-living model builds a sense of community for residents and provides a very flexible business model that can adapt quickly to a myriad of social and economic changes. This is a huge upside for the industry, as an uncertain future awaits all of us as the coronavirus crisis continues to impact across the globe.