Adam Neumann’s new venture targets prime residential real estate
Flow — WeWork founder Adam Neumann’s newest company that aims to disrupt the residential experience — has designs in some of America’s most competitive real estate markets.
Why is this important: At its beginnings, Flow has already acquired thousands of residential units in Atlanta, Nashville and Miami — cities where residents already struggle to find reasonably priced homes to rent or own. Markets in these places have been shaken by business investment.
- Flow announced on Monday that it had secured a $350 million investment from prominent Silicon Valley venture capital firm Andreessen Horowitz.
- “The investment thesis for Flow appears to reflect economic and social trends that are driving more people to rent homes rather than buy them at a time when there is a housing shortage,” The New York Times said. reported.
What to expect: Details on the company’s exact business plan remain scarce, but Andreessen Horowitz said in a blog post that Flow aims to”[connect] people by transforming their physical spaces and creating communities” within their homes.
- Earlier this year, Tim Peterson of Florida-based Altman Cos. was hired to manage some of Neumann’s new properties in Miami, suggested to Bisnow that his vision was to create a community atmosphere.
- He said that could potentially be nurtured by programs like fitness events, a speaker series, or volunteer events.
The big picture: Flow’s top three cities have already seen their housing markets transformed by companies gobbling up single-family homes and turning them into rentals, driving up house prices and rents.
- According a Redfin analysis.
Enlarge: Take a look at Nashville, where a Neumann-related entity recently bought all 268 Stacks on Main units for $79 million.
- The percentage of Nashville homes being purchased by businesses has risen from 17.3% in the first quarter of 2021 to 24.6% in the first quarter of this year, driving up the purchase price in a booming market.
- To meet rent demand, Nashville will see its projected apartment inventory increase 7% from 2021 to 2022 — the largest increase in the nation. It’s still cheaper to rent than to buy in town, where an average downtown apartment push $2,000.
- Stacks on Main — in slightly cheaper East Nashville — has a saltwater pool, dog park, and trash pickup service. The most affordable one-bedroom unit currently costs $1,475 per month, according to the resort’s website.
Deirdra Funcheon, Nate Rau, Adam Tamburin and Thomas Wheatley of Axios contributed to this report.
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