Co-Living and Co-Working Catch on in Urban Areas

Living Space Sharing: In major U.S. cities such as New York and San Francisco, apartment rents are so high that developers have been testing “co-living” spaces where tiny apartments share kitchens, lounges and communal atmospheres. The Coronavirus pandemic took a toll on many co-living companies, with several closing or consolidated. In mid-2020, WeWork shut down its WeLive program.

Common (www.common.com) had buildings in 17 cities including New York, New York; Los Angeles and San Francisco, California; Chicago, Illinois; Philadelphia, Pennsylvania; Washington, D.C. and Ottawa, Canada as of 2024. Common acquired Starcity’s 7,500 units (which were part of the branded Ollie co-living spaces in New York, New York; Pittsburgh, Pennsylvania; and Los Angeles, California) in mid-2021. Manhattan-based Outpost Club (outpost-club.com), which offers apartments and houses in Manhattan, Brooklyn and Queens, took over Stoop, Bedly and Quarters.

Other startups are focusing on leasing furnished and unfurnished apartments with short-term flexible leases. For example, Sentral (www.sentral.com) offers a network of thousands of apartments in 17 U.S. cities, that allows renters to book units for any length of stay. Sonder Corp. (www.sonder.com) and Mint House, Inc. (minthouse.com) offer similar leasing options. This can be particularly useful to renters who are on short-term work assignments who are not sure of how long the work will last, as well as people who want to try out a new city temporarily before they make a commitment to move there.

In China, co-living has been popular with millennials. Unlike co-living arrangements in the U.S., China’s renters have been willing to share bedrooms in addition to bathrooms, kitchens and living areas. You+ offers co-living spaces in Beijing, Shanghai and Guangzhou for about $300 per month. Buildings offer amenities including gyms and bars. Although primarily focused on young, single Millennials, married couples are welcome at You+ as are pets, but children are not allowed. Residents over age 45 are discouraged.

Workspace Sharing: The fundamentals of the office sharing trend were damaged severely during the COVID era, including the obvious problems of difficulty in social distancing in shared spaces, along with soaring unemployment rates and the rapid escalation of work-from-home, which hurts the market for office space of all types.

A leader in this niche is WeWork (which filed for bankruptcy in late 2023 and remains in operation while reorganizing). The company leases large office spaces, such as entire floors or buildings, divides the space and then sublets to other companies. The company had more than 700 locations in 39 countries as of late 2023. Workspaces are provided in two ways: On-Demand and All Access. On-Demand is a pay-as-you-go product that offers customers access to workspace on an as-needed basis. All Access is a subscription-based model that provides members with the ability to work from any WeWork location. Partnerships are available for brokers, landlords and event planners, among others.

Low demand during the Coronavirus pandemic led additional firms to file for bankruptcy, including Knotel (which took bankruptcy in early 2021), once a very large operator, and Serendipity Labs. Several business entities linked to IWG PLC’s office suite rental business also took bankruptcy.

As an alternative to signing long-term leases for space, there is a growing tendency for shared workspace operators to sign management agreements. These agreements allow for the operators to apply their expertise, marketing and digital platforms, while providing the building’s owners with a share of the revenue, as opposed to a guaranteed rental payment.

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