Coliving is on the rise — and 2022 will be no different. But what are the hottest trends that will drive the industry in the coming 12 months?
As host of the Rooftalks podcast, I have spoken with many great guests over the last couple of months, ranging from leading coliving operators to the most prominent advisory organizations.
Based on these conversations, here are my seven hottest coliving trends for 2022:
1. Merger and Acquisitions remain high on the agenda — One of the most remarkable coliving development over the last 18 months was the speed at which its consolidation played out — from Starcity and Olli to Common and Node, the Collective and Quarters; significant changes for many early movers that have helped to put Coliving onto the map! Like in any growing industry, consolidation was bound to happen at some point, but the pandemic accelerated it by the factor 5 and created a shift in sentiment: Venture capital was looking for a way out, real estate funds and investors were looking for a way in. The good news: This trend will continue in 2022. On top of that, all these transactions add essential data points to create further confidence in the investment community while also clarifying how coliving assets are being valued and thus helping to derisk exit scenarios.
2. Coliving becomes an established part of a mixed-use set-up — In 2021, we saw the first push towards including coliving into mixed-use residential schemes; a strategy being successfully used, for instance, by Common. This trend is to further intensify in the year ahead. While coliving is also maturing as an asset class in itself, the integration into larger real estate schemes is good news for the operator. It allows for bigger-scale developments, spreads the risk between different asset classes, and allows for vertical mobility within the same building/brand. Like that, anyone that enters a new stage in their life (e.g., getting married, getting a child, ending a relationship, etc.) does not need to look for a different living set-up but can move a couple of floors up (or down) and stay within the same building.
3. Increasing investments into the industry — In 2021, we saw a lot of serious investments into coliving brands worldwide — also marking the arrival of institutional money into the coliving segment. This trend will keep accelerating in 2022, which helps to put coliving as an asset class onto the map, creates liquidity in the market, and results in further proof points on what financial performance can be expected from coliving brands. Those benchmarks are also helpful for the operators to understand how their performance compares with the industry and where they can still improve.
4️. Residential community tech maturing — 2021 has seen a lot of interest on the tech side! We have seen various operators boldly stepping into the unknown to kick-off their tech effort — and some closing shop again. The one thing that is still lacking as we entered 2022: A clear market leader for coliving tech. I am sure that 2022 will create clarity in this market, and a clear market leader will emerge. Of course, having worked on the Obeyo tech for the last year, I am biased about who that will be. :)
5️. Community building becomes a must-have — With more and more brands entering the coliving market and the broader residential living segment catching up on the importance and value of community in residential settings, the big trend for 2022 will become resident engagement and community building. Here some industry giants in both coliving and multifamily/ BTR are already moving boldly forward, eager to increase the bar that everyone else needs to adjust to. This is will at the same time also be expanding the competition in the coliving segment and further require a clear value add to stand out. As a result, technology will become an even more critical part of the equation.
6. Future market leaders are moving into coliving — While the early movers in the market have significantly contributed to getting coliving onto the map, I am confident that the brands that will dominate the space over the next 5–10 years are only now being born. New operators moving into this market have many lessons learned at their fingertips to kick-start their avoid costly mistakes and legacy systems. Also, access to funding has significantly improved, which is why new Coliving brands can skip entire funding stages that previously were compulsory to prove your concept in the market. As a result, they will be able to enter the market at scale, and subsequently, scale faster.
7. Demand for coliving is going through the roof –Finally, with remote work being here to stay for a significant amount of the working population in the new hybrid work era, demand for coliving will go through the roof over the next 12–18 months. This is driven by remote workers increasingly enjoying their flexibility of slow travel and becoming at least partly digital nomads. As a small indication of what's ahead: We have, for instance, seen demand for colivingmap.com, a comprehensive inventory of coliving locations worldwide, increase fourfold over the last couple of months alone.
Next to all these predictions, one thing is for sure: No matter in which intensity we see all of those trends playing out, 2022 will become the most exciting year for coliving yet. So if you are an active player in the coliving field, get ready for what's ahead!
What do you expect to happen in our sector over the next 12 months?
Feel free to share your thoughts in the comments below — or dive deeper into the different topics by listening to our Rooftalks podcast. And of course, if you know someone that should be on the show, let me know.
About the author Michael Steinmann is the Co-Founder and CEO of Obeyo. With more than 15 years of experience in growing and scaling SaaS companies, he is always up for connecting and conversing about the present and the future of residential community building.