With venture capital scarcer, companies feel a need to combine to get investors' attention, she said.

Cushman & Wakefield reported 90% occupancy rates for co-living companies at the end of the third quarter of 2022, and traditional real-estate firms like Cushman and Greystar are now offering their own co-living brands.īut scale remains the path to profitability with any tech-enabled businesses, including co-living and property management, says Clelia Warburg Peters, a managing partner at Era Ventures who serves on boards of proptechs such as Welcome Homes and Side. Things have begun to stabilize in the co-living sector, which saw its promise of highly amenitized, dorm-style living for young professionals clash with the public-health realities of the pandemic.

Industry participants like HubHaus and WeWork's WeLive concept were shuttered, while others, like Common, expanded their strategies to provide branded property management for traditional apartments. The co-living world was hit hard in the early days of the COVID-19 pandemic, when shared apartments became a source of viral fear. We took a look at each of these transactions to learn more about what the coming year will look like. There are also what Valner called 'adjacent space' transactions, or the combination of companies with complementary products or services. First, there are transactions between competing startups in the hope of increasing scale and profits. These transactions showcase the two types of transactions happening right now, Valner told Insider. Two days later, the fintech Pagaya said it had acquired the single-family rental-property manager Darwin Homes to build out its single-family rental business. On Monday, the US co-living and property-management startup Common and the German co-living company Habyt announced a merger to create what they said would be one of the world's largest shared-apartment platforms. It'll be a busy 2023 if the first two weeks is any indication. He said he's working with firms looking to raise funds or be acquired as a way to weather the storm. 'As companies watch their runways shorten, they're looking for ways to solve that problem,' Valner said, referring to the ramp-up period for startups. 'Consolidation is going to be one of the main topics of the year,' said Sandor Valner, a founding partner at the real-estate-tech investment bank Proptech Bankers. The booming real-estate market of the pandemic years is also gone, slamming the door on the transactions needed to both boost proptech revenue and encourage the adoption of the companies' services. One reason is that proptech venture investment dropped 38% last year from a heady 2021, and private valuations for later-stage startups shrank by 70% or more from May to September. The proptech companies that sprang up by the dozens in the past few years are now looking to one another for help.Ī massive consolidation among companies that seek to make real-estate transactions and services more efficient and profitable is underway. The two transactions preview two different ways consolidation is likely to play out this year.The co-living operators Common and Habyt merged Pagaya brought the property manager Darwin Homes.Real-estate tech companies are teaming up to weather the macroeconomic storm.Account icon An icon in the shape of a person's head and shoulders.

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