September 19, 2019
Finding Common Ground
Tucked off the scruffy main arteries of Atlantic Avenue and Fulton Street in Brooklyn, smattered with car repair shops and deals to fix flats, live glorious side streets that provide a glimpse into yesteryear. One such street, Grand Avenue in Bedford Stuyvesant, offers a charming hodgepodge of stately brownstones and wood-frame houses with crooked windows and front porches.
Spring is having a hard time of it – doing its best to shake off winter – as tulips make a valiant effort to burst open during a dreary April. A handsome classic brick and limestone four-story apartment building with ornamental lintels sits near the end of the street, where elderly men with metal canes, a group of young girls with linked arms, middle-aged women with grocery bags and the occasional hipster with a beard like Ulysses S. Grant walks by. In case you’ve been in a cryogenic freeze these past 10 years, Brooklyn is having a moment as it revitalizes to produce a hot real estate market.
Despite the old-world feel of Grand Avenue, there’s something of a modern revolution happening at number 417.
It’s called “coliving,” and it’s about to change the way you think about roommates.
Brian Lee ’00 is the senior director of real estate for Common, a four-year-old startup that provides private rooms and shared living spaces for young adults in major cities. “In America,” Lee says, “70 million people live with non-family member roommates today, and there is no real estate product that serves that demographic, even though it’s a huge and it’s growing population. That’s where Common fits in. We’re trying to capture the people in the market who move to new cities and have to find a roommate on Craigslist to live in a decent part of the city. This arrangement is always ad hoc and unpredictable, so we’re trying to create a branded, professional product that elevates the roommate experience.”
If that sounds like a lofty goal, consider that since Common opened its doors in 2015, the company now has 800 bedrooms across the United States and boasts a 99 percent occupancy rate. At any given moment, Common has only 10 to 20 beds open but receives over 154,000 leads per month. The average age of a Common “member” or renter is 29, with a median income of $73,000; 60 percent are new to the city they’re moving to. These young adults favor convenience over “owning things,” community over solitary living.
Lee explains that Common partners with real estate developers to build either new or existing shared living spaces, providing a quasi-WeWork for residential living. The apartment at 417 Grand Avenue has a13 bedroom unit – four people on one floor in separate bedrooms- who share a state-of-the-art kitchen and a spectacular common area with cool architectural nods to its history. “This building was a full-gut renovation,” Lee says.
“I spend a lot of my time with real estate developers along the East Coast – New York, Boston, Atlanta, Miami – explaining what exactly coliving is and why it’s not as crazy as it might sound on the surface,” Lee says. “Real estate is a pretty conservative industry which makes my job challenging but also fun. It’s satisfying to watch a brand, and a business and an asset class grow before your very eyes.”
Move over Ikea and particle board furniture. No more carting a monstrous second-hand stained couch up and down floor flights of steps. Do I sound bitter? Common homes, designed by Sophie Wilkinson, vice president of design + construction and a former Apple Store designer, are fully furnished with luxe trappings. There are the honey-colored soft leather Mies van der Rohe-inspired chairs, deep-seated off-white sectional, the artfully-arranged chunky throw draped over the arm of a chair that truly must have been crafted with the knitting needles of a giant. Nothing has been spared to create a space that is at once timelessly elegant and yet warm and inviting. If the interior design aesthetics do not wow you, perhaps the 20-foot-high ceilings caught your eye. Practical folks might be attracted to the unending supply of paper towels, soaps, and olive oil. Dishes included? Check. Free Wi-Fi? Check. Utilities? Check. Once-a-week house cleaning services? Check. Is this a renter’s heaven? It comes pretty close. But all this comes at a price, of course. A small one-bedroom unit with the included amenities starts at $1,650 in this space per month – a relative bargain in Brooklyn – and less than what it would cost in the open market.
After graduating from Yale in 2004, Lee took his first job as an equity trader at UBS in Tokyo, where he traded Japanese stocks and portfolios for two years. Following that stint, he moved to another branch in Hong Kong for two more years, where he worked in the company’s Fundamental Investment Group, where he analyzed proprietary investments in the Chinese real estate sector.
“Living in Asia after college was amazing. I love crazy, hectic cities and had opportunities to travel to places like India, Laos, and Myanmar. But ultimately, I wanted to emphasize the “real estate” part of my job rather than the “finance part.” So he moved back to the U.S., enrolled in business school at Wharton and afterward worked at Tishman Speyer, a global real estate developer, where he repositioned and redeveloped office buildings like the Chrysler Building and the MetLife Building in Manhattan.
Now at Common, Lee has been at the ground level since 2018, helping to build this disruptor brand. Lee likens Common to a hotel flat operator, which doesn’t exist in residential real estate. “With hotels, you can think of many brands like Hilton, Hyatt, and Marriott,” he says. “In residential real estate, you don’t really find that. So Common aspires to build an international residential brand. Today consumers think about Uber with ridesharing or Airbnb with short-term rentals. We want people to think of Common when looking for an apartment.”
“Coliving is a nascent concept,” he continues. “There are only a handful of players, but competition is good because it gives credibility to the idea. Everyone is taking different approaches. WeLive does shorter-term stays. Common typically does 12-month leases. We’re trying to make it as close to the standard residential experience as possible. Real estate is conservative. Owners and lenders want to see if the concept works before committing to it.”
So far, it appears to be working quite well. As future job market trends indicate more contract work and frequent relocations, Common is poised to grow exponentially. Currently, Common projects are under development in the top 15 U.S. metro areas and are already operating in six: New York, including 14 properties, Chicago, Washington, D.C., Los Angeles, Seattle, and San Francisco. The company just signed its first international deal in Ottawa, Canada. As the person responsible for expanding properties on the East Coast and building partnerships with real estate developers, Lee says, “We believe that this a big and deep market, and Common can be successful wherever people live with roommates and affordability is an issue.”
Common removes the headaches of roommate living by conducting credit checks and criminal background checks down to the county level, exposing any past evictions. There are no more sketchy roommates, no more waiting for the cable guy. A 24/7 on-call membership services team acts like a concierge, fixing a broken toilet broken or finessing a roommate problem. By branding a similar aesthetic and experience across different markets, Common offers comforting predictability. They’ve minimized the unfortunate surprises that often accompany apartment living.
Lee describes Common as a “magical product,” part technology, part real estate, and part consumer product, especially for someone moving from Minneapolis to Atlanta who doesn’t know the real estate market or how to find an apartment. Consumers visit the Common website, tour a home, fill out some basic information and receive a phone call within five to 10 minutes from a Common salesperson. A consumer can move from an initial inquiry to a bedroom within 48 hours.
The next step for Lee is to help Common build a portfolio of brands. He was instrumental in partnering with his former firm, Tishman Speyer, in building Kin, a residential product geared for families with young children who want to live in cities. These two-and three-bedroom units are equipped with nanny-sharing services, daycare, stroller parking, babysitting, and planned activities.
So far, Lee is thinking big. “We are in the second or third inning of this whole business,” he says, “and we’re going to scale more and more in each city so we have tens of thousands of beds across the U.S.”
The concept is so compelling that as soon as I fix my faulty plumbing, I’d like to put my house on the market. Hello, Brooklyn!
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