The commercial real estate industry is going through one of the most challenging times in history over the past year. Although vaccines are beginning to be more widely distributed, the future of the housing rental sector is still up in the air.
Within the industry, short-term rental and coliving spaces were among the most impacted by the pandemic due to their sublease and master lease business model.
Over the past year, short-term rental space startups like Lyric, Stay Alfred and others shut down. However, this does not automatically mean that the managed space and coliving sectors are totally unsustainable.
For instance, coliving operators Starcity and Common raised $30 million and $50 million, respectively, during the pandemic.
This indicates some promise for the industry and shows which direction the real estate industry could move post-pandemic. With remote working becoming a mainstay for many professionals, more will experiment with the digital nomad lifestyle.
According to MBO Partners, around 10.9 million American workers will identify as digital nomads soon, a 48% increase from 2019.
While hotels and corporate apartments might be the ideal solution for accommodating pandemic-related precautions, coliving spaces offer a sense of community, fully-equipped work environments and lower costs than traditional housing arrangements.