Tag: adam neumann

• A discussion about Adam Neumann’s new residential apartment startup — Flow

  This an interesting discussion about Adam Neumann’s new startup Flow (which I recently wrote about here).

  More specifically though, the discussion is about venture capital firms backing “failed” entrepreneurs, and whether or not Flow can really be that much more valuable than your typical apartment REIT.

  In its simplest form, Flow might just end up being an apartment company with a strong national brand and a consistent resident experience. But maybe that’s all it needs to be.

  If the link doesn’t already do it for you, jump to the 7:19 mark to start with this discussion. After Flow, the podcast moves on to housing policy in the Bay Area, Houston, and Miami. So you may also want to stick around for that.

  Thank you Ocean Jangda for sending this over.

  2022.09.01

• Adam Neumann raises $350 million to revolutionize the apartment market

  Today it was announced that venture firm a16z has made a $350 million investment in Adam Neumann’s new residential rental company called Flow (which is kind of ironic).

  The company is set to launch in 2023 and nobody on the outside seems to be entirely clear on how it plans to revolutionize the multi-family rental market, but supposedly this funding round values Flow at more than $1 billion and supposedly Neumann will be rolling in the 4,000 or so apartments that he has been buying up.

  In any event, here’s how a16z described the opportunity (I think the key sentence is probably the one about creating a system where renters become like owners):

  Only through a seismic shift in the way industry relationships are structured and the mechanisms through which value is delivered can we hope to address the underlying problems of the current system and build the solution. Doing this requires combining community-driven, experience-centric service with the latest technology in a way that has never been done before to create a system where renters receive the benefits of owners. This means rethinking the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders. And given the fragmented nature of the ecosystem today, we can only hope to accomplish any of this by bringing every aspect of the living experience together.

  What I will say is that I think it’s great to see this amount of innovation-focused money flowing into the residential real estate space, which is, after all, the biggest asset class in the world and one that could certainly use some fresh ideas. Apparently it’s also the biggest funding round that a16z has ever done.

  But I also find a16z’s characterization of the problems a bit odd. Renting an apartment is described as this soulless and profoundly lonely experience where you’re so ashamed of where you live that you’re even hesitant to invite friends over. They also conflate house with home, as if to say that you can’t have the latter without the former.

  On second thought, maybe these are exactly the right problems to be solving. It is our biases that we need to do something about.

  2022.08.15

• Adam Neumann has quietly acquired some 4,000 apartment units

  So it was announced today that Adam Neumann — the cofounder and former CEO of WeWork — has been quietly buying apartment buildings across the United States. According to the Wall Street Journal, he is involved in entities that have acquired more than 4,000 apartment suites valued at least $1 billion.

  The buildings, which seem to be fairly typical and have at least a few hundred doors, are located in cities like Miami, Ft. Lauderdale, Atlanta, Nashville, as well as in many other US cities. It’s not clear what the exact plan is for this real estate but people who claim to know things are saying that it will involve “redefining the future of living”, or something along these lines.

  Presumably this means catering to young professionals with cool design, fun amenities, and beer taps. Whatever ends up happening, it is interesting to see some of the cities that he/they are targeting. They are the cities that we’ve all been talking about for many years. You know, the ones that are growing quickly and have greater housing supply elasticities.

  2022.01.04

• More than a real estate company — a state of consciousness

  Matt Levine’s most recent Money Stuff article is classic Matt Levine. It is both entertaining and informative. This one is on WeWork – the coworking startup that has committed to 14 million square feet of office space around the world and will have $18 billion in rent payments due over the next decade.

  Here is an excerpt:

  WeWork Cos. is a real-estate company with a couple of innovative twists on the model. First, rather than owning its buildings, it rents them: It leases office space from regular real-estate companies, adds … beer? … or whatever, and then subleases the space to tenants at higher rates. And second, rather than being valued like a real-estate company, it gets valued like a hot tech startup — “the sharing economy,” ping-pong tables, etc. — so it can raise gobs of money from SoftBank Group Corp. at a $20 billion valuation without ever getting particularly close to profitability. And look at all these words:

  “Indeed, to assess WeWork by conventional metrics is to miss the point, according to [Chief Executive Officer Adam] Neumann. WeWork isn’t really a real estate company. It’s a state of consciousness, he argues, a generation of interconnected emotionally intelligent entrepreneurs.”

  Really, what sort of multiple would you put on a state of consciousness?

  2018.04.27