No Comments

Developer Exploring Second Co-Living Project On Miami Beach

Rishi Kapoor is looking to develop a second Urbin-branded, co-living project on Washington Avenue in Miami Beach.

The Miami Beach City Commission on Monday granted preliminary approval to allow co-living units on Washington Avenue north of 12th Street, and to extend a deadline for Kapoor to obtain building permits until 2027.

Kapoor, CEO of Coconut Grove-based Location Ventures, is under contract to buy a retail building at 1509 Washington Avenue and a mixed-use apartment building at 1515 Washington Avenue, said Michael Larkin, a lawyer representing the developer.

Kapoor has submitted an application to redevelop the properties that will have to go before the Miami Beach planning and zoning and historic preservation boards, Larkin added.

The city has already approved Kapoor’s six-story co-living project at 1260 Washington Avenue (rendering pictured above), which he is developing under Location Ventures’ Urbin brand.

Under the proposed new legislation, the city would allow developers to build projects with co-living units north of 12th Street and Washington Avenue, but any proposed building cannot have hotel rooms or short-term rentals. In addition, only 50 percent of the project can be set aside for co-living units, and the apartments or condos must be a minimum of 275 square feet.

 

Source:  The Real Deal

No Comments

To Ease Rent Crisis, Miami City Commission May Change Zoning Code To Allow For Communal Living Developments In Wynwood

After gaining notoriety as the center of the housing crisis in the US, Miami is looking to co-living developments to calm soaring rent prices.

Today (3/23), the Miami City Commission is considering changes to the zoning code to establish regulations regarding co-living. If adopted, the amendment will allow for communal living developments to rise in Miami’s bustling central business district, health district and Wynwood.

Last year, Miami surpassed New York City and Los Angeles as the most expensive housing market in the nation. In June 2022, the Biden administration called Miami the ‘epicenter of the housing crisis.’

Government agencies like the Department of Housing and Urban Development (HUD) see co-living as a solution to provide working-class individuals with affordable shelter.

Communal living has roots dating back to the 19th century, when tenements and boarding houses became popular. Modern co-living spaces feature private bedrooms designed around a shared living room and kitchen.

21st-century co-living communities have emerged as an amenity-laden, roommate-sharing concept to facilitate an environment where working professionals can thrive at a fair price.

The proposed legislation limits co-living developments to the civic center and health district, central business district downtown and neighborhood revitalization districts in Wynwood. These are Miami’s busiest urban areas and have rapidly grown in the post-pandemic era as people from across the nation flocked to South Florida.

Background information states the city “recognizes the growing demand for accessible housing options, including co-living concepts, incorporated in urban center and urban core areas where there is significantly less reliance on automobiles and enhanced utilization of bicycle and transit facilities that connect to places of employment and other services.”

The ordinance defines a co-living unit as communal living quarters consisting of private bedrooms and bathrooms with a shared space that includes a full kitchen with direct access to the outside or a common hall.

Each unit would be allowed a maximum of six co-living rooms. A co-living room is defined as a single bedroom within the unit. Under the proposed requirements, a co-living room must be at least 180 square feet and could not exceed 400 square feet.

The operational plan required under the new ordinance stipulates all co-living units within a building must be managed by one centralized operator and at least one dedicated employee must be available 24 hours a day to respond to residents’ needs.

On Feb. 15, the Planning, Zoning and Appeals Board recommended approval of the zoning text change in a vote of 8-1.

What attracts most residents to co-living communities is a home in a well-run building in a good area at a reasonable price. The developments offer fully-furnished units, including everything from sheets to silverware and weekly cleaning services. All utilities and various tech services like WiFi and Netflix are included in the monthly rent.

Another positive of co-living is that it eliminates the financial liability of roommates by offering individual room leases rather than group leases.

Co-living is popular in major urban areas like New York City. Zoning ordinances, however, restrict communal housing in many areas. Changes on the regulatory front, like the amendment before the Miami City Commission, are needed to address barriers to opening co-living communities.

In 2022, Florida topped the Census Bureau’s list of fastest-growing states as the population grew by nearly 2%. Attractive lifestyle and job opportunities put Miami on the map of most popular US migration destinations.

During that time, the cost of rent in Miami increased over 30% from 2021 to 2022 and the county was ranked the most competitive rental market in a year-end survey by RentCafe.

In April 2022, Miami-Dade Mayor Daniella Levine Cava declared an affordable housing crisis and allocated an additional $13 million in rental assistance through the Emergency Rental Assistance Program.

Two months later, HUD Secretary Marcia Fudge met with local leaders to tour affordable housing projects in Miami.

“I decided today to come down to the epicenter of the housing crisis in this country,” said Ms. Fudge. “It is a shame that people who work hard every day cannot afford to live in the communities in which they work.”

After her visit, Ms. Fudge said more affordable housing projects must be created to lower housing costs and called for support from federal, state and local governments to make it happen.

A study from Florida International University regarding affordable housing revealed Miami has the highest proportion of cost-burdened renters in the nation, with 53% of renters spending 35% or more of their household income on rent.

HUD defines cost-burdened people as those who pay more than 30% of their income for housing and may have difficulty affording necessities such as food, clothing, transportation and medical care.

Creating co-living developments will provide renters with more affordable housing options and relief from record-breaking rent prices.

Market reports forecast co-living developments to increase in coming years as the communities could be a solution to the affordable housing crisis.

In January, the largest co-living operators in US and Europe and Asia, Common and Habyt, merged to form Habyt Group. The move created the largest co-living brand in the world with locations in more than 40 cities and 14 countries and over 30,000 communal units.

While the co-living sector represents a small corner of the housing market, the desire for communal living, like rental prices, is rising.

 

Source:  Miami Today

No Comments

Miami Beach Approves Co-Working, Co-Living Project

Miami Beach officials approved URBIN, a coworking, co-living project that includes wellness and a hotel.

URBIN Miami Beach Partners‘ project was approved for 62,000 square feet of development, including four floors of coworking with 139 desks, 49 co-living units, 56 hotel rooms, and a 4,000-square-foot wellness center at 1234 and 1260 Washington Ave. There would be a garden and lounge on the roof. The project would include a small retail space.

The developer, Rishi Kapoor, would demolish a retail building on the property and renovate an office building. The new building would rise six stories.

 

Source:  SFBJ

No Comments

Co-Living Was Built Around Sharing Living Spaces with Strangers. Will It Survive Through a Pandemic?

Before the coronavirus hit, co-living projects were attracting more and more investor money.

Now, as public officials continue to encourage social distancing, questions are rising about whether residents in co-living buildings can even follow these guidelines, as they share communal spaces and sometimes even bedrooms. NREI spoke with Gregg Christiansen, president of Ollie, a co-living operator, about the state of the co-living industry and how the sector has been responding to the pandemic.

This Q&A has been edited for style, length and clarity.

NREI: How has the coronavirus outbreak impacted the sector?

Gregg Christiansen: I think it’s a little too early to tell. What we saw so far in our assets at Ollie, where we focus on long-term leases and institutional quality buildings, we initially saw a pick-up in occupancy in the first few weeks. I think that was really due to the ease of moving into one of our co-living units. So, when all the universities shut down their student housing buildings, we saw an influx of people wanting to move into an Ollie property. So, that was a good thing, I think that was a positive.

I think there has been some criticism, or at least people thinking and starting a little bit too early of a debate, in my opinion, around densification and urbanization. There’s some debate starting to happen on whether urbanization is going to be a thing in the future and whether densification is going to be a bit more criticized than it has been in the past, given that COVID is a virus that transfers to people in close quarters. So, the question is if the government is going to demand spaces to be bigger where people live. If that’s the case, I think there’s going to be a lot of people pushed out of the cities, because the cost of those units is going to be much more expensive to build. So, I think there’s a little bit of a double-edged sword right now in some of the arguments.

What we’ve seen from a positive standpoint as well is our residents have actually appreciated being around roommates and not feeling like they are living in a studio or a one-bedroom apartment all by themselves. So, they actually have the ability to interact with their roommates. So, we view that as a positive from some feedback that we’ve seen. But there’s going to be a debate around apartment buildings and “are people going to be more inclined to live in the cities or not?” That’s a much broader discussion to have, so we’ll see what happens.

 

NREI: Do you think the outbreak might affect the co-living sector the same way it affected the co-working sector?

Gregg Christiansen: No, I think it’s going to be much more resilient. So, co-working [operators basically have] little one- and two-person glass wall rooms that break up a floor plate and stuff as many people into the smallest square footage as possible for the co-working operator to be able to justify the economics to themselves, and a lot of those leases are set on 30-, 60-, 90-day type of structures. Some of them are longer term, but for the most part, they’re pretty short-term leases, with a majority of tenants being small business or entrepreneur-type of individuals. So, in a COVID-19 world, where entrepreneurship is going to be put on pause, you’re going to see a lot of small businesses probably not make it. So, filtering back to the co-working space, the co-working space is going to be the first line to really get hit pretty hard. [It’s going to be] anybody really with short-term lease structures, so you take the hotel industry, the short-term stay industry, co-working industry, and they’ve been probably the hardest hit right out of the gate because of COVID-19. If everybody stops paying rent, people are going to try to get out of their office leases.

The thing about co-living is it’s where people live. It’s where you go home every night. It’s your place of being. It’s where your friends and family know you’re at. So, we’ve actually seen co-living be much more resilient than co-working because those are two very different industries. They get associated with each other a little bit because of the ‘co’ and the sharing economy concept, but when it comes to where someone lives, I think that they take it much more personally and it requires us as a co-living operator to really treat them with the dignity they deserve.

 

NREI: Has the technology co-living operations use been able to help solve the need for social distancing?

Gregg Christiansen: As we were building out our platform earlier, there were a couple things that we saw as a need to communicate and interact with our resident population, but also to make the ease of living much more accessible. We created an app, it’s called the Ollie Living app, and in that, we have the ability to send out notifications, residents can turn on or turn off services, they can ask for maintenance requests, pay the rent, they can sign up for our social calendar.

Immediately after COVID-19 hit, what we had to do as a team, and something I was very proud of with our team, was create a virtual social network where everybody is allowed to go on and sign up for events. Our Ollie social events would typically be in the building, or a local cooking class, or at a yoga studio, but we’ve transitioned our social calendar into more of a virtual social concept. We have cooking classes now online and we do yoga through Instagram. So, we try to still create the feeling of our social calendar, just through our technology that we’ve created. I think that’s actually been extremely beneficial to have that available for our residents, and we’ve actually seen a pretty good participation rate with our residents staying at home.

NREI: Any guidance you can provide on occupancy rates and move-in rates? Is there a concern around those metrics if the lockdown persists?

Gregg Christiansen: I don’t think we have enough data yet to be able to see if there is going to be a concern. We have four different existing assets that are open and operating, we have two more that are under construction, and so, what we’re seeing in New York is we’re still seeing people sign leases. We have the ability to do virtual tours. All of our applications are all on the internet. You can go on and sign a full lease just through the website and do a virtual tour and never have to ever touch a property. So, that’s great. What we have also been able to develop is a roommate-matching software platform that allows people to find other people to live with. So, even if they are not able to go to the property, they’re actually able to create and form a household on our roommate platform virtually.

Occupancy for us is really stuck at above 90 percent ever since COVID-19 hit. Our Pittsburgh asset had a tick-up of about five percent in occupancy once you saw the universities shut down. Then our property in Long Island City is close to 90 percent occupancy now. So, we’re actually seeing positive movement so far.

If [lockdowns] persists for two, three, four months longer, I think a lot of multifamily projects are going to start to see some weakening in occupancy. I don’t think co-living or even standard apartment buildings are going to be completely isolated from that impact, it would be something that we would all have to rally around. But people are already talking about opening the economy again a month from now and we’re starting to see states open back up, so knock on wood, hopefully we don’t get to the point where we’re in July and August and we’re still in this isolation situation. I think the benefit of our properties is that we have long-term leases, so for the most part we have seen occupancy stay above 90 percent since COVID-19 hit.

 

NREI: Are co-living properties still attracting investor dollars? Is that mood changing?

Gregg Christiansen: I think it’s a little too early to tell. I think what we’re going to have to get over is the perception that densification might be more criticized than before. I think people are going to want to see that play out a little bit. What we’ve seen in the real estate industry generally is everybody has put their pencils down for the time being from buying or developing or pushing forward new investment ideas across the spectrum. Whether that’s an office or industrial or multifamily [asset, and] retail especially, people have [pressed] pause to see what the world looks like in a post COVID-19 world. I think co-living is not an exception to that rule. It was a growing niche and people were starting to give it the right attention at the end of 2019, heading into 2020. We were starting to see our pipeline really pick up. So, we were pretty excited about where things were going.

But what we are actually probably going to see is some deals and some development projects either see some issues in financing or delays or certain management companies just not survive. Some portions of businesses will have some failed launches, or some failed start-ups, and I think co-living is not going to be immune to that either. So, we’re paying attention to that a bit.

Our investors are a bit longer term investors, they’ve been supporting us really since 2017. So, we’re pretty excited about where we’re going. Co-living is a niche and niche industries are generally the first to be put on the backburner when there is a recession. I think what co-living has going for it though is we are more flexible and have leaner kinds of platforms. So, we’re actually able to jump into buildings and help out much quicker than your standard co-type of industry.

 

NREI: Are there any other trends developing that you feel are worth keeping tabs on?

Chris Christiansen: I think a couple of things. I think you should be paying attention to delinquencies. That’s something that we’re really watching pretty closely. Just because we have long-term leases doesn’t mean necessarily that everyone is going to pay rent. I think the short-term stays sector is really something to focus on. What we’ve seen so far is our delinquency rates in our co-living units have actually stayed at or slightly above the conventional properties that we’re operating in. So, that’s great. But we’ll obviously have to monitor that pretty closely here soon. And then looking at how governments are going to respond to densification.

 

Source:  NREI

No Comments

Co-Living, Senior Housing Can Produce Higher Returns: ULI Panelists

Developers are counting on demand to be strong for co-living apartments in Wynwood, offering lower rents, shared common areas and amenities geared to promote face-to-face interactions among residents.

“There is a real vibe in these buildings,” said Swiss real estate developer Ralph Winter, whose company, W5 Group, is developing a Wynwood co-living project with the Related Group. “It is very comparable to student housing except here you have people coming from all over the world [as roommates]. They really like it.”

Winter joined Alberto Milo Jr., president of Related’s affordable housing division, and Greg West, CEO of ZOM Living, for a panel discussion on the latest trends in multifamily development at the Urban Land Institute’s Housing Opportunity Conference on Monday. Ron Terwilliger, chairman of Terwilliger Pappas Multifamily Properties, was the moderator.

Winter said his project with Related, called w28 and designed by Arquitectonica, will likely take two-and-a-half years to complete. As the lead equity partner, W5 Group is providing 80 percent of the capital to build w28. The project will have 200 co-living apartments and 3,600 square feet of ground-floor retail. The development is set to rise at 33, 45, and 51 Northwest 28th Street, three parcels Related bought for $6.5 million in June.

Apartments at w28 will be fully-furnished, have shared common areas and include streaming services such as Netflix — features that appeal to millennials, Winter said. He said kitchens are designed to encourage interactions between an apartment’s tenants, such as drinking beer on a dining counter.

“This is more of a prime concept to bring people together,” Winter said. “We have seen in our research that the loneliness factor for a 25-year-old is much higher than for a 65-year-old. [Because of smartphones] they are not really connected in a face-to-face manner. That is what we try to do in these buildings.”

Winter said a co-living tenant can expect to pay 15 percent less than the average monthly rent for a studio. However, a room in a co-living apartment averages 140 square feet, he noted. Winter explained co-living apartments are attractive to young professionals who may not stay rooted in one city or often travel for long periods of time for their jobs.

“We have guys from Google and Apple who could easily pay $3,000 a month for an apartment,” Winter said. “You are paying to be part of a membership, an exclusive circle….They say, ‘Oh that is a cool place, and I want to be a part of it.”’

On the flip side of the demographic spectrum, demand for luxury apartment buildings geared to senior citizens is booming, according to ZOM Living’s West. His company is developing the Watermark at Merrick Park in Coral Gables and the Watermark at West Palm Beach, two mid-rise multifamily projects strictly for people near retirement age.

West said senior housing monthly rents can produce about an 8 percent yield compared to the typical 6 percent yield of regular apartment buildings.

“The exit [rate of return is] higher than conventional multifamily,” he said. “We’d sell apartments in the 4 [percent range]. In senior housing, you will sell at 6 [percent].”

However, multifamily owners have to employ more people to provide property management services. And achieving full occupancy takes longer in senior living buildings, West said.

The three-day ULI conference featured two days of panels on Monday and Tuesday. The event concludes Wednesday with site tours of various projects in Miami-Dade, including Related’s Liberty Square redevelopment project, the Link at Douglas transit-oriented development by The Adler Group and 13th Floor Investments, and condo buildings that allow short-term rentals.

 

Source:  The Real Deal

No Comments

Another Co-Living Apartment Building Is In The Pipeline For Wynwood

Another co-living project is in the pipeline for Wynwood.

The project between 33-51 NW 28th St. will include 200 fully-furnished units, according to a press release. The 8-story project will have 3,600 square feet of ground-floor retail space. Amenities include a gym and rooftop pool. The Related Group will develop the project with real estate investor W5 Group. Related and W5 hired the Grove-based architectural firm Arquitectonica to design the building.

It will be another co-living building in Wynwood, behind the Property Markets Group and Greybrook Realty Partners project.

“As a Miami resident myself, I have witnessed Wynwood’s ascent with some interest,” said Ralph Winter, principal of W5 Group in the release. “However, as neighborhoods become more desirable, young people are often priced out. Co-living is an exciting proposition that offers tremendous value, enabling them to experience modern living in highly attractive units — all while meeting like-minded individuals and forming rewarding new bonds in coveted metropolitan areas.”

Co-living, or apartments building with micro units and shared amenities, including communal kitchens, is one way developers aim to resolve Miami’s growing affordability issue.

The investment is part of the effort to expand the Berlin-based Quarters co-living and property management brand on behalf of the W5 Group and the Medici Living Group. The teams are investing $300 million of equity to expand the brand in select U.S. cities from Europe. There are 14 cities across the globe, including Miami, that are expected to receive a Quarters-branded project or already have one, including Washington, D.C., New York, Chicago, the Hague, Stuttgart, Munich, Rotterdam, Hamburg, Amsterdam, Frankfurt, Philadelphia and Düsseldorf.

The W5 Group has offices in Switzerland, New York and Miami. It established its foothold in Miami Beach in 2009.

The neighborhood continues to attract developers. A new hotel by the San Francisco-based Sonder team and an office building are also planned for Wynwood.

 

Source:  Miami Herald

© 2024 FIP Commercial. All rights reserved. | Site Designed by CRE-sources, Inc.