How to Scale Coliving Operations with Brian Lee. #rooftalks Ep. 1
Listen to Brian Lee, Managing Director, Real Estate of Common, as he shares his experience in scaling coliving operations.
We released our first Rooftalks podcast with Brian Lee from Common. Brian is Managing Director Real Estate at Common and has helped them scale their operations internationally. Together with Brian, we’ll be talking all things coliving operations at scale.
We share similar pains and opportunities globally.
Moving from New York to London, Brian witnessed similar trends in those two cities: Youngsters prefer to live in metropolitan areas and are getting married later. The rents are rising while income remains relatively stagnant. And: The traditional real estate market has come under pressure by an ever-growing amount of built-to-rent and shared living developments. This all brings new opportunities, especially for innovative residential operators, as there is a massive demand for a thorough make-over of traditional rental models.
A team with a hybrid culture adds valuable perspectives.
When talking about the culture inside Common, Brian mentioned that the interdisciplinary nature of their team provides a never-ending source of fresh perspectives. In Common, people with traditional real estate backgrounds are working side by side with software engineers, who — having worked with companies like Airbnb, Dropbox, and Facebook — add a lot of innovative thinking and a competitive edge into a more traditional business. On the other hand, people in their finance team look at everything from a financial angle and help translate their products into the correct language that investors understand. This is also what we can learn from Common: building a team with diverse backgrounds pays off; in terms of occupations and work history, and also in terms of nationality, ethnicity and personality, as this allows you to create solutions that are more inclusive and holistic.
Capital structure as the key for long-term business success
One of the most challenging issues for coliving operators is how to get their business to scale. On this topic, Brian highlights the importance of having the right capital structure in place that supports and aligns with your business’ ambition.
“When it comes down to capital structure, we [at Common] made a very clear decision back in 2018, to focus on being asset-light. And this means operating by just signing management agreements, making Common a fee-driven business. We get fees from management, from operating buildings, and we get design fees for interior design. So it’s a very asset-light model. The consequence is there is very little capital risk that we need to take, and that’s what allowed us to scale quickly.”
Technology is fundamental in leveraging economies of scale.
When looking at technology adaptation, the real estate industry has traditionally been slow to innovate. However, technology has a lot of power to improve the business on the operational and people side. According to Brian, automation and technology have had an enormous impact in simplifying processes and workflows at Common, while real estate traditionally has been focused on pen and paper. As businesses of different sizes will have different needs, tailoring the existing applications towards the scope of the business is essential, which seems to be largely missing in today’s market. Common currently has a team of 30–40 software engineers driving their technical development — a significant cash investment that not everyone can afford. A good solution in the market would make quite a big difference for the industry.
Think outside the industries for best practices
Last but not least, Brain also mentioned the importance of looking for best practices outside the real estate industry. Looking for what kind of software applications can bring into the industry and help solve their business problems. This does not only apply to the management issues but also the community building in the industry. How can we leverage technology to shape a better human-centric living environment? How can we utilize technology to best scale our business? Those problems are still waiting to be solved. At Obeyo, we are building the next generation tech for shared living together with industry leaders. Check out obeyo.com and learn more about how our technology can bring your operations and community to the next level.
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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.