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CONSUMER TECHNOLOGY TRENDS 2020
Image: ZeroDown
Real estate Life after WeWork
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eWork’s failed public listing cast a cloud over serviced real estate, but we still expect increased demand for new business models that change how we live and work. The global co-working operator had raised $22.5bn in debt and equity, opened 850 locations, and scaled to about 15,000 employees in 123 cities. But thin margins, sizable capital requirements and no realistic path to profitability proved a bad mix when trying to go public. Its failed public listing had ripple effects further afield, drying up access to capital for any company that couldn’t show a route to profitability at scale, and more so for those trying to innovate real estate with master lease models,
debt and tech-enabled operations. This won’t stop the music for modern real estate operator models. A low-interest environment means a lot of capital looking for yield. From a supply-side perspective, you can think of WeWork and others as specialised real estate managers able to optimise occupancy better than developers themselves. While any landlord can offer a desk and coffee at $450 per month, scaling this offering, while keeping occupancy in line, is hard. A related sub-sector is co-living and short-term renting, including the likes of Sonder, Zeus and Life House. Notably in co-living, many are targeting young professionals, from Bungalow to The Collective and LifeX.
In 2020, we are watching out for the emergence of ‘full-service’ rent providers. People change location more frequently, feel lonelier, and increasingly favour access over ownership. But everybody wants to live in the city even as prices go up and up. We’ll see new providers building co-living concepts optimised for specific target groups. These not only include young professionals, but shared living for older people, serviced living for families, digital nomads, home workers, people of different interest groups or sustainable living concepts.
Everybody wants to live in the city even as prices go up and up
