For many years people would ask me if we were going into co-working because people in many ways compared co-living and co-working or combined them and I would say “no we are residential focussed, we’re focussed on the residential experience, office is a different sector, we don’t want to get into that” and then Covid made a liar out of me because suddenly whether you wanted to or not, if you were operating residential buildings, you were also running office space because everyone was working out of those.
Susan Freeman
Hi, I’m Susan Freeman, welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum, where I get to interview the key influencers in the world of real estate and the built environment.
Today I am delighted to welcome Brad Hargreaves. Brad is the Founder and CEO of Common, America’s leading residential brand that designs and manages multi-family apartments with more than 5,000 residents in over ten markets across the country. Before founding Common in early 2015, Brad was the Co-founder of General Assembly, a global education institution with campuses in more than 15 cities worldwide. As part of the General Assembly founding team, Brad led the growth of the company’s education business from its launch in 2011 into a global institution with over a dozen campuses. Most recently he was a venture partner at Maveron, General Assembly’s leading investor. Brad has been named as Ernst & Young’s 2020 Entrepreneur of the Year, Vanity Fair’s The Next Establishment, Ink Magazine’s 30 Under 30, Business Insider’s Silicon Alley 100 and Crane’s 2017 40 Under 40 and now we are going to hear from serial entrepreneur, Brad Hargreaves about his rapidly expanding co-living business, Common, his plans for future growth and what he has learnt along the way.
Brad, hi, so thank you for joining us today, I think you are talking to us from New York?
Brad Hargreaves
Hi Susan, great to be here.
Susan Freeman
And, I have to ask you this, you have the most fascinating accent and I can’t quite place it but clearly you weren’t born in London so, where did you start? Where were you educated?
Brad Hargreaves
I am yes, thank you Susan for having me on.
Susan Freeman
So we are going to be talking about your co-living business, Common but before you get started could you just tell the listeners just a little bit about you, where you grew up, whether you always planned to become a serial entrepreneur and how things got started?
Brad Hargreaves
Yeah, absolutely. So as much as what we are doing at Common today is about cities, I certainly did not grow up in a city, I grew up in the rural south, Southern Arkansas in the United States and you know, I went to college in the North East, moved to New York City and began my love of cities and of what cities can bring to people and can bring to communities and you know that naturally lead in to the businesses I have started in my career, most notably about 12 years ago I Co-founded a business called General Assembly which became the largest trade school in the US, focussed on teaching topics like web development, user experienced design, data science, really bridging that gap between skills that are part in University and what’s needed in the workforce today so today we do about 30,000 students a year. We sold that business a handful of years ago to Adecco Group, a large global staffing firm and I have been focussed on Common day-to-day for the past 5 years and Common originated very organically and out of that I have seen some of the housing crisis that faces major cities today.
Susan Freeman
And it is true that you are a big advocate of boredom because when you were growing up in Arkansas there wasn’t that much to do and you had a chance to do some blue sky thinking?
Brad Hargreaves
Yeah I, I certainly spent a lot of time playing around with computers and you know, I would say I did grow up in a very rural, very isolated area, you know we packed up the car once a week to drive to the grocery store which was you know, about an hour away so it was you know, it gave… it was in some ways isolating as a kid but also gave me a lot of time to think, to experiment with technology and you know, I think I’ve two young boys myself now aged 2 and 4 and I think a lot about not over programming their lives and giving them some time to you know, be creative, to explore you know, tougher in New York City where there’s a lot going on to replicate that but I think a lot about that and the level of programming that we have in kids’ lives today.
Susan Freeman
That’s so interesting isn’t it because we probably try to fill our own lives and our children’s lives with just so many activities so that nobody misses out on anything. So what was the opportunity that you saw when you started Common, what, you know, what was, what was missing, what wasn’t being done?
Brad Hargreaves
Well General Assembly was a school so, so we brought not just students but also instructors and employees to cities where we had our campuses where we offered our classes. We were primarily unclear 6.05, we have and today have a large online component but we had a lot of people moving to places like New York, we have you know, the second city we expanded to was London and so we had a big UK presence as well but like New York, London, San Francisco, DC, those were our largest campuses and we had people moving there and you know, they wouldn’t often look for an apartment, they would look for a room in a shared suite, often on Craig’s List of some roommate matching app and it was a pretty rough experience. Some people were lucky and found great people and you know, a quality place to live, others had nightmare stories. So we looked at this and in the US alone there’s 25 million people who live with roommates, who share a home or apartment with someone they are not related to. And I think that’s broadly representative of some of the challenges that face the housing sector specifically there is really a gap between a lot of what’s being built and what’s needed, specifically on the affordability side, there’s a real need for attainable housing and not enough of it being built. And so broadly we started Common to address that gap, to focus housing on for a user experience, from a product stand point on what’s really needed to be thoughtful about design and then from a consumer stand point to really build a more affordable and more convenient kind of housing, starting with co-living, starting with… we look at co-living as roommates done better, keeping the good parts, the social environment, the affordability but getting rid of many of the annoyances as we can control through cleaning, through providing a shared kitchen and bathroom supplies, through splitting the bills for them. So that’s really how we got into Common, got into residential real estate and today we have about 6,000 units under management and around 20,000 signed and under development in 28 cities.
Susan Freeman
So a common development one would expect smaller bedrooms with you know, great sort of shared living spaces. Just for the benefit of our listeners who, who don’t know, don’t know Common, I mean are there any operators in the UK for instance that are similar to what, to what you are doing or does it not exist?
Brad Hargreaves
Yeah so co-living takes different manifestations in different cities based on culture, based on history, based on building code so and in every city it takes somewhat of a different form. In the US what we typically see are shared apartments where you have multiple private bedrooms, usually with private bathrooms. The bedrooms are quite big, they can actually be larger in many cases than you would have in a comparable, traditional apartment but there are more of them and they open into a shared kitchen and living area. So that’s a typical model in most cities in the United States. In the UK when most people talk about co-living they are really talking about micro-apartments so smaller apartments with a little kitchenette, little bathroom that open up into a corridor and you have many of those in a hallway and perhaps there’s more amenities in the building, there’s more programming in the building. So generally there is some, some definitional changes and there are certain cities in the US where there are micro units and those are prevalent such as Seattle, we manage about 800 micro-apartments in the city of Seattle but in general micro-apartments are where we are in the United States. And so in the UK for instance The Collective is probably the largest operator merchant is Founder and CEO there, they are a bit different than we are, hard to get into those details and that, they are unclear 10.15 integrated owner, developer, operator whereas we are really focussed on the operational side and we work with third party owners and developers. So we are set up in different ways and I think some of the differences in the residential industry in the country drove that difference.
Susan Freeman
It’s interesting, you mentioned The Collective and being vertically integrated because it seems very much in the UK when you look across you know, the whole picture on build-to-rent and co-living that the developers tend to at the moment, tend to develop and operate so do you develop or is that something that you are not interested in getting involved in?
Brad Hargreaves
We don’t, we made a strategic decision that we are not going to do our developments, you know we would view that as competing with our customers, competing with our clients so… and that’s more of a typical business strategy in the United States you know, the build-to-rent sector in the US is approximately 50 to 60 million apartments; it’s a massive sector, it has been around for many, many decades, there are established third party property managers, you know the largest third party property manager in the US is Greystar. More people live in Greystar than live in the city of San Francisco, just to give you a sense of the scale of some of these operators. So it’s, it’s much more established in many ways in the States. I would argue that there are a lot of ways to do that management better. It hasn’t changed a lot since the 1980’s in terms of how it’s done and I am happy to talk about some of what we are doing on the build-to-rent side as a whole. In the UK, build-to-rent is much more nascent and there is a lot of reasons for that but you don’t have really established third party property managers in much the same way so when developers in the build-to-rent sector say hey we are going to roll out a strategy of building you know, amenitised rental buildings in you know, top five UK cities or on to the continent, they almost always vertically integrate and say they are going to do their own management as well. There are a few exceptions but generally we see them self-managing, there are just not that many good third party managers in Europe right now and I include the UK in that. I believe that’s going to change. I mean in the US you saw the separation of development and management decades ago as developers said ‘we’re going to focus on the development side, we’re going to focus on the asset management side, we don’t want to get tied up in the weeds of property management’ and many developers are subscale and really to build a property management company you need to be managing many thousands, if not tens of thousands of units to get economy subscale. It is very tough to scale a development from that far, much easier to get that scale on the management side.
Susan Freeman
So you are absolutely right about describing our build-to-rent sector as nascent, it’s… I mean it’s I think just over 10 years really you know since we got started and it’s taken a long time for units to come out of the ground. So you were talking about you know, how to do it better so I think it’s probably a good point to talk about how you do do it better because you are taking over buildings that are owned by you know, big, big property companies and investors and you obviously are able to come in and increase the efficiency and productivity. How, do you do that?
Brad Hargreaves
Yeah so there are a few different methods that we use to improve the returns on rental assets. One is coming and bringing a brand. One thing we noticed in the early days of Common is that there are really no middle market residential brands. There are very high end residential brands like Related, Equity Residential, Avalon Bay that do a great job marketing to a luxury tenant but there is really nothing that is, I don’t want to say, you know, the South West Airlines, I don’t know that analogy you know, translates to the UK but high quality and affordable, there’s nothing in that middle market keyer where someone graduating from school, someone who is you know, has just got a job in the city and has two weeks to move says ‘hey I am just going to move into the Common because I know that it’s going to be high quality, I know my toilets going to get fixed, I know what I am going to get and its affordable’ and that middle market brand is really what we set out to build with Common and we really measure that by how many people are coming and applying to Common directly through our website, so not through a you know, a booking site or through a listing site and today that’s about 25,000 people a month come and book a tour or request to live at Common directly through our website. That number is growing anywhere from you know 5 to 10% per month so we are really focussed on how do we build that dedicated consumer brand. That makes it so much more efficient on the marketing side and enables faster lease ups. The second is centralised operations and the role that technology can play in that. Residential real estate management today is still very decentralised. Pretty much everything that happens at a building operationally happens physically by people sitting at that building. That makes sense for some things such as repairs and maintenance, such as fundamentals of property management. It doesn’t make sense for a lot of other things; inside sales, responding to leads, scheduling tours, lease administration, doing credit checks – there are a lot of things that don’t make sense to happen at a building. We centralised that and when you centralise it you are able to automate a lot of those tasks and make those tasks happen more efficiently and effectively and in a high quality way. So those are really the two main areas, brands and I would say tech enabled centralisation that we’ve brought to the multi-family industry in the United States.
Susan Freeman
So technology is pretty key to what you’re providing?
Brad Hargreaves
It’s essential and I would say that one, when many people hear technology and real estate they either think of you know, shiny gadgets on the wall or they think of you know, mobile apps in the hands of renters and we have some of that stuff although I would say that is perhaps less impactful than perhaps some of the buzz around it but where there is massive lift of technology is on the back of house, on the operational side. How do we make lease administration more efficient, how do we make ticket routing and handling when somebody submits an issue about a building, how do we prioritise those issues, how do we aggregate that data and make that data under… and use that date to understand our tenants better, understand who’s going to churn, who’s is going to renew and then automate that renewal process in a more effective way. How do we project rent growth, how do we project occupancy? There are a lot of ways that technology can really improve returns on the back of house side, I think personally are more impactful than on the consumer side.
Susan Freeman
That’s interesting because you are right there is, you know, people talk about you know these exciting apps that, that tenants can use and you know, can do all sorts of wonderful things for them but it is the sort of less sexy back of house that’s probably more important. So perhaps we can talk a little bit about the brand side of things because I believe Common now has three brands? It seems to be growing quite fast so it might be more by now but you set up Kin as a JB with Tishman Speyer just 2019, in fact just before we went into the pandemic and I think that focusses on families living in cities with children which is something which co-living had not catered for very much. How has that been going?
Brad Hargreaves
Yeah so Common has three brands; Common is our main, our first brand, our main brand that’s really focussed on young professionals, we do all of our co-living under the Common brand that is the largest of the three brands but what we created over the past year is two additional brands to serve other audiences. The first is Noah which is our workforce housing brand. A majority of multi-family in the United States is considered workforce housing, tend to be low rise, suburban garden style assets targeting people who make around the area medium income. So these are apartments for nurses, for police, for fire fighters and you know, they tend to be under appreciated and under loved in the broader multi-family sector. I think it is important to note that the United States unlike the UK does not have a large social housing sector. It’s very, very undeveloped in the US and in many cases workforce housing serves the role in the US that social housing serves in the UK, even though it is privately owned and privately operated. So we started Noah’s workforce housing brand to bring some of that technology, some of that efficiency to these workforce housing projects, they tend to be very, I don’t want to say poorly managed, but let’s say, you know, the books are kept with a box of receipts in the closet tends to be how, how these workforce housing projects are run. So we started that actually, it was a real estate partner, one of our owners came to use and said ‘I’ve been working with Common the co-living side for years, would love to bring Common in to manage our workforce housing as well’ and so that’s been a real success, we rolled out across the Mid Atlantic last year, this year we expanded to Boston with a portfolio of six workforce housing assets in April so that’s been a real growth area.
Susan Freeman
We use the expression ‘key worker’ in the UK which I think equates to what you refer to as workforce so it’s you know, it’s the policemen and nurses and you know, firemen – all the essential people who you know, are finding it very hard to live in city centres, yeah.
Brad Hargreaves
Absolutely and our third brand is Millie, we actually re-branded recently Kin to Millie and that was really started seeing a need, I mentioned earlier I have two young children, it’s challenging to raise children in a city and you know one of the things that makes it easier is being around other families and seeing the benefits of you know, raising kids in a family orientated environment. So we have four buildings now under the Millie brand and you know some of the offerings there are units that are designed with families in mind, many of those buildings have day care in the amenity space, things like date night drop off, children’s orientated programming so there are a lot of things that you know, the Millie brand brings to benefit families.
Susan Freeman
And have you thought about later living?
Brad Hargreaves
We, you know, it’s interesting. We, we look at it and it is something we’ve talked about internally. There are some great operators in the, in the senior housing space that you know, we don’t have a thesis yet for how we do that better and we have to have a lot of conviction when we go into a new brand, when we go into a new sector that you know, there’s a need for us to be there, that there’s an opportunity for us to fundamentally do it better, to transform it in a positive way both on the owner’s side and the renter’s side and we don’t have that conviction yet in the later living space. But it is something that we are interested in and it is clearly a high gross sector.
Susan Freeman
And in terms of expansion, you seem to be expanding pretty, pretty rapidly at the moment although you know, I was thinking like a year back you know, at the start of the pandemic it must have been you know, quite challenging you know when people were nervous about sharing space with, with other people but I mean did that in any way inhibit your growth?
Brad Hargreaves
I would say there was certainly in the second quarter of last year, going into the third quarter there were a lot of question marks about co-living, I mean as an area, as a way people want to live you know, we clearly given the cities we were in saw a big dip in occupancy, I think it bottomed out a little bit below 80% occupancy in late Q2 so there were a lot of questions around co-living as an area people want to live. That recovered fairly quickly, we are back to the low to mid-90’s occupancy today, you know, we are seeing people come back to cities, you know the affordability promise of co-living you know, that hasn’t changed, people still want an affordable place to live, they want something that’s high quality, they want something that’s in a great neighbourhood. That hasn’t changed at all. What we did see is the construction lending market really did slow down overall and around co-living. That is starting to come back, we are starting to see projects get financed again but that’s probably been the slowest to recover from the pandemic.
Susan Freeman
And you obviously are sort of moving to different cities in the States, are you looking to expand internationally?
Brad Hargreaves
We are yes, you know I mentioned earlier that you know there really aren’t I would say, many third party property managers at any kind of scale operating in the UK and in continental Europe overall today so we are actually in June we are going to have our first team members on the ground in London, really focussed on better understanding the market and paving a path for our expansion to Europe. So we are very excited about that, we’ve been very US and to some extent, Canada focussed to date, we have a few signed projects in Canada in both Toronto and Idowa so Europe is really the next, the next growth area for us.
Susan Freeman
That’s exciting, we will look forward to seeing you over here and just you know, talking about the you know, the knock on effect of the pandemic and you know much of it started before Covid but there are a lot of buildings that now require repurposing so you know, particularly on the retail side. Are you seeing the conversion of hospitality and offices to residential and how’s that looking?
Brad Hargreaves
Yeah so we are seeing a lot of it, it’s been you know, I mentioned earlier that Covid has been somewhat challenging from a co-living stand point although that’s coming back. It’s been great from an overall property management stand point because a lot of owners are thinking about the role of technology, they are looking to repurpose assets, they are really thinking hard about what the future looks like and they are coming to us and you know, one of the things about Common that’s important to note is you know, we are not just a management firm. We actually have a build-in design capability as well so we are really integrated with about 20 architects and designers on staff and that gives us that feedback loop of taking data from the operations and incorporating them into the design, it’s a great conversation to have between the architects on our team and the operators. What I would say is on the conversion side, on the hospitality conversions we are seeing a lot of those, a lot of hotel to residential conversions. We will see how that you know, as things start recovering, as travel returns you know, how much of those we continue to see. Offices and retail tend to have their, you know, we see a lot of interest there, they tend to be challenging from a conversion stand point. The floor plates are often wrong, you know the offices have very deep floor plates so converting to residential you end up either with very funky shaped units or high loss factor, they also often don’t have the right mechanical, you need to re-do the HVAC, the electric, the water, the sewer, it’s all tricky so in many cases we see office owners saying ‘hey you know, we looked into it, it would be… we would be better off building from scratch’ and the repurposing narrative is, is it’s exciting but there is deep, deep challenges to it.
Susan Freeman
Yes and it’s you know, it’s a shame to have to contemplate tearing down and rebuilding if only just you know, from the sustainability point of view. Also one of the things that’s come out of Covid and the lockdown is you know, a different way of living and working and increased remote working and I just wondered whether you know, that’s made you reflect on the way you design your units because people are now thinking they need somewhere to work in addition to somewhere to live.
Brad Hargreaves
Yeah absolutely you know, it’s been funny, I always said for many years people would ask me if we were going into co-working because people can in many ways, conflated co-living and co-working, combine them and I would say ‘no we are residential focussed, we’re focussed on the residential experience, office is a different sector we don’t want to get into that’ and then Covid made a liar out of me because suddenly whether you wanted to or not, if you were operating residential buildings you were also running office space because everyone was working out of those. So we really looked at that in two layers. First is you know, the buildings we have, we have and we have to, you can’t necessary go in and change the unit configurations so it’s really about how do you offer quality working space in those suites or in those buildings and so one thing we’ve been doing is taking lease in offices, taking any excess space in the building and converting it to working space for the tenants just to give them a space to get out of their rooms, get out of their units, go somewhere, plug in and get some work done so that’s been a big initiative of ours. As we think about designs going forward, we’ve been incorporating a lot more kind of one plus dens, units that have some dedicated working space, slightly larger bedrooms in co-living units because we do believe that remote work is here to stay, that you know, Covid is going to be more or less over pretty soon but you know, people will either be fully remote or in some sort of hybrid situation working from home one to two days a week for a longer period of time. So we are, we are thinking about that from a design stand point when we work with owners.
Susan Freeman
And I also saw that you’ve put out an RFB for remote work hubs and that you are… you have now got some potential sites that you are looking at.
Brad Hargreaves
Yeah so we, this is something we did about a year ago, we kind of in the… when everyone was trying figure out what was happening with Covid and with the future of remote work we said, hey there’s a big part of this that’s here to stay, that there are going to be more permanently remote workers, people who can live and work in wherever and so the job of economic development that cities have to do, you know, where it was previously about recruiting the headquarters or recruiting factory, now it’s about recruiting individual workers. How can you make a city appealing to someone who can work from wherever so we sort of flipped the model on its head and said let’s create a number of remote work hubs, places that are affordable, that are designed for living and working, that have high speed internet, that have access to great amenities and market those to our audient, I mentioned earlier 25,000 people a month apply to live at Common. Let’s market those to those audiences of people who can live anywhere but maybe need a little guidance, want to try out a city for three months. So we got 28 applicants of public private partnerships, so Governments in partnerships with developers, we have edited those and picked five winners, we really wanted to get a diversity of different places, different cities and they are all going through the development process now, the first one will open at the end of this year, early next year, that one is an adaptive re-use one in Rochester, New York and we have four others that are ground up in New Orleans, Rocky Mountain, North Carolina, up in Utah and Bentonville Arkansas. It is US focussed but we are excited to do more outside the US as well.
Susan Freeman
No it’s exciting because it’s probably not something that one would have thought of you know, a year and a half ago.
Brad Hargreaves
Right.
Susan Freeman
But that’s you know, that’s the way things, things are going and as part of Common you talk about the need to create communities and I just, I wondered if you could just talk a little bit about you know, how you do that and whether you think it’s something that property companies are doing whether they are doing it in the same way as you?
Brad Hargreaves
Yeah so it was one of our values from the very beginning and we had three values that we believe renters are looking for that are missing in rental properties today. The first which I mentioned quite a bit is affordability, the second it convenience and the third is community and those, you know different rents want them in different proportions so you know, we survey our renters on a regular basis and say ‘hey of these three value propositions you know what do you rank most highly?’ and it always varies. Some people say ‘hey we are coming for the community, we want to come to events, we want to get to know people’. Others are like ‘hey I just need an affordable place to live’. So the community it can’t be too in your face, it can’t be like oh you have to come to this event, you have to buy into this set of values but it’s you know, particularly given that more than half of our tenants are coming from someplace else, they are coming to a city for the first time, that just getting to know your neighbours like, being in a warm and welcoming environment, we’ve seen a huge increase in renewal rate if someone makes a friend outside of their suite in the first two weeks of living at Common so there are a lot of benefits to just you know, community tends to be a very fuzzy word, a lot of people use it in a lot of ways. I just look at it as warm and welcoming environment and opportunities to meet new people.
Susan Freeman
Sounds, sounds pretty good and are you seeing a younger generation of people who are choosing to rent as a lifestyle choice or do you think that’s a myth and they would buy if they could?
Brad Hargreaves
You know it’s tough to understand the reveal preference there. You certainly see a lot of people looking for the things that come with you know, the rental experience, the flexibility. A lot of people aren’t ready to settle down, say this is where I want to live long-term, this is the you know, the unit, the apartment I want to own so you see a lot of people particularly kind of under 40 that are looking for that but you also see a lot of empty nesters, more people whose kids have moved out saying ‘hey this house, this apartment is weighing me down, it’s tying me to a given place, it’s too much space, I want to move into a rental experience, live in an urban centre, see something different’. So you kind of see it on both ends of the age curve of people preferring not the financial structure of renting but the flexibility that comes with renting, the experience, the quality of a lot of new build rental product so you certainly see that in rental preferences.
Susan Freeman
It is interesting because as we discussed earlier, the build-to-rent sector in the UK is relatively new so the choices just haven’t been there and rental has been you know, in the past very much sort of amateur sector so it’s good that we now have that. And you mentioned affordability and you know, the difficulty of finding a good product that’s affordable. What can cities do to make housing more affordable because it seems to be an endemic problem in so many cities.
Brad Hargreaves
Well I think the easiest answer which is you know, I believe fundamentally true is they can build more housing. You look at it across the board and the cities that have been able to maintain affordability are those that allow a lot of different types of housing to get built. I love using Seattle as an example because Seattle faces a lot of similar challenges to San Francisco and other cities that have had major job booms but have come to a very different outcome. So San Francisco obviously has some of the most expensive rents and housing anywhere in the world. Seattle is also a major tech hub, it’s not quite what San Francisco is but it’s you know, solidly number 2 or number 3 in the United States in terms of tech job growth. Companies like Amazon, like Zillow are hiring tens of thousands of people in Seattle yet Seattle unlike San Francisco has a much more liberal zoning code, they are much more aggressive about building transit, they are more aggressive about enabling people to build housing so we manage, I mentioned earlier, about 800 micro apartments in Seattle, that’s not a product you can legally build in most other places in the United States. You know, we manage some micro apartments that are 25 square metres and that’s a full unit in 25 square metres and that rents for around $1,000 to $1,100 a month in a prime well located neighbourhood in a high quality building and there are not many other cities that are experiencing the kind of tech enabled job growth that Seattle has that you can get those rents. That similar unit in San Francisco would probably rent for $2,000 a month so they have been able to maintain affordability because they’ve built and it opened and encouraging growth, building transit into new areas to unlock additional housing supply and you know, obviously a lot of cities in the centre of the country, places like Houston, like Dallas that have also been very aggressive about growth, I would say they’ve done so in a bit more of a sprawly way that has generated a lot of issues in terms of car traffic, in terms of pollution but have also been able to maintain affordability just by going out, out, out.
Susan Freeman
Yes I think in planning terms there would be a lot of resistance certainly in London to micro apartments and I think you know, that’s one of the issues, the planner talk about bedsits, and they don’t necessarily understand what the co-living product is and can be concerned about you know, just having sort of small apartments.
Brad Hargreaves
Yeah it’s certainly something a concern here and you know, one of the reasons why we focus on you know quality and amenitisation is to just demonstrate and give examples of what this product is and you know, once people see it, once they walk it, it makes a lot more sense. It is one of those things that in theory sounds really challenging, in practice is really well designed, is providing a housing option that wasn’t there before and that is meeting a real need for someone who otherwise would be living an hour outside the city so it’s, it’s something you know, that we really encourage people to tour the product to understand and compare it to kind of what the status quo is.
Susan Freeman
Yes I think with the focus on the concept of the fifty minute city, not wanting people to drive in cities, you know maybe we have to re-visit space standards because something has to, something has to give doesn’t it. So is there any reason why a property company shouldn’t launch its own consumer co-living brand. I mean, I suppose some landlords are trying to do it. Is that something that property companies can do do you think?
Brad Hargreaves
I think one of the challenges as I mentioned earlier is, is scale. You know, most developers are not able to reach a level of scale to actually get traction on a bespoke brand so unless you are talking about you know, many thousands of units in many different cities in a pretty short period of time and a very aggressive marketing campaign to go against that brand, it’s really tough to get any traction against a new brand. Common spends… I mean we spend millions of dollars a year in marketing at the brand level to build awareness for what we are doing at Common and get traction outside of individual cities so we don’t just want people in New York to know about Common in New York, we want people in you know, Ohio to know about Common in New York. We want people in Europe to know about Common in New York because a lot of them you know certainly prior to Covid, would come here to study, to take an internship, what have you. So there are benefits to having a brand that has real reach and real penetration. Look at the hospitality sector, there’s a reason why a lot of hotel owners have decided to work with one of the major operators, they have that traction, they have that brand reach, they have the built in audience and we see a similar trend on the rental sector. Similar with operations you know, they are a real benefits of scale, it’s very tough to run a one-off handful of buidings. So we do believe that the UK will trend more in the direction of the US of consolidation on the management side.
Susan Freeman
It’s interesting isn’t it because the importance of brands and bringing in an operator with a good brand also now affecting the office sector so it you know, is something that is now common if you will excuse the pun to various parts of the real estate sector. So I have to say I very much look forward to Common coming to the UK and you know, it will be great to see your product over here.
Brad Hargreaves
Thank you.
Susan Freeman
So Brad, thank you, thank you very much for your time and I hope to meet you in London.
Brad Hargreaves
I would love that, I will be there this summer.
Susan Freeman
I look forward to it.
Brad Hargreaves
Sounds great. Take care Susan, thank you.
Susan Freeman
It was really fascinating to hear from Brad Hargreaves about the rapid growth of Common and the roll out of their new co-living brands. It looks as if we are going to be seeing Common in the UK very soon. So that’s it for now. I hope you enjoyed today’s conversation. Please join us for the next PropertyShe podcast interview coming very soon.
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