Happy Friday! Next week, I am running a 60-minute webinar and Q&A about the office market in 2020, looking at the impact of WeWork & Knotel’s slowdown, opportunities for landlords and startups, potential macro shocks such as Brexit and Coronavirus, and overall risk considerations for investors. The first 10 subscribes that register get a 30% discount (coupon code: SUB30). You can register here.
UK readers are reminded to join us on February 20th in Central London for the launch of my new book. Full details here.
Below are the 7 most interesting things I’ve seen this week at the intersection of the physical and digital worlds — followed by some bonus content.
1. Co-living is going institutional. Sequoia, Warburg Pincus, and traditional real estate giants are backing co-living operators across Asia. There is immense potential for expansion in the continent, where more than two-thirds of Millennials currently live with their parents. Over in the US, Common, a co-living operator, was recently added to the pre-approved property managers list of Freddie Mac, one of the biggest providers of liquidity for the mortgage market.
2. America needs a (smaller) bath. The number of bathrooms per capita has doubled since the 1960s. The median bathroom size has doubled since the 1970s. And the share of homes with over 10 bathrooms has doubled since 2000. Housing is a reflection of the economy: Many people can’t afford buying a house; those who can afford it, buy bigger houses than ever. Looks like the next decade will continue to be good for extreme products: shared housing for rent and extravagant units for sale.
3. Buying a house in California? You must be high. Real estate brokers in the Golden State are staging cannabis vaping events in different properties in order to attract buyers and get them in the mood. If you buy high, will you end up selling low? Time will tell.
4. Office landlords are starting to miss WeWork? The coworking giants slashed its expansion activity in Q4 2019, dropping from 2.54 million sqft of new leases per quarter to a meager 184,022. How will this slowdown affect the office market in 2020? I’ll dive into this question in next week’s Webinar.
5. The future of retail is office? Fenwick, a 140-year-old department store in the heart of London, received approval to reduce its retail area and add, instead, more than 50,000 sqft of new office space. I looked into how changes in the retail, hotel, and housing market might affect overall supply and demand for office In my book.
6. Atari is gaming the hotel industry? The maker of the 80s’ favorite console is in talks to develop a series of gaming-themed hotels across the US. As the thesis goes, video gamers spent over $150 billion dollars last year, and they love playing with other gamers. This continues a long line of human interactions that are moving from the realm of the social/spontaneous to the realm of paid/structured. I’m contemplating writing my next book about this dynamic.
7. Japan puts “family” in multifamily. A residential developer in Japan is employing actresses to enable (mostly male) buyers to envision how life might be like once they move in. The prospective buyers can spend time in sample apartments and participate in various scenarios, including watching TV on the couch with a “wife” and helping a “daughter” with her homework.
8. Bonus content:
🎧 How can history inform the future of retail development, design, and financing? What did WeWork get wrong (and right)? I had a fun time discussing this and more with Nicholas Frank on MRI’s Building Success podcast.
That’s it from me. Feel free to forward this email to a friend or share the subscription page on Twitter or LinkedIn.
Have a great weekend!