WeWork founder's new venture eyes prime residential real estate
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Illustration: Brendan Lynch/Axios
Flow — the brand-new company from WeWork founder Adam Neumann that's meant to upend the residential experience — has designs on some of America's most competitive real estate markets.
Why it matters: In its early days, Flow has already acquired thousands of residential units in Atlanta, Nashville and Miami — cities where residents are already having a tough time finding a reasonably-priced place to rent or own. Markets in those locations have been roiled by corporate investment.
- Flow on Monday announced it had scored a $350 million investment from prominent Silicon Valley venture 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 reported.
What to expect: Details about the venture's exact business plan remain scarce, but Andreessen Horowitz said in a blog post that Flow aims to "[connect] people through transforming their physical spaces and building communities" within their homes.
- Earlier this year, Tim Peterson of Florida-based Altman Cos., hired to manage some of Neumann's new Miami properties, suggested to Bisnow that its vision aimed to create a communal vibe.
- He said that could be potentially nurtured through programming like fitness events, a speaker series or volunteering events.
The big picture: Flow's first three cities have already seen their housing markets transformed by corporations gobbling up single-family homes and turning them into rentals — in the process driving up both home and rent prices.
- All three were among the 10 U.S. metro areas with the largest share of homes purchased by corporate investors in the first quarter of 2022, according to a Redfin analysis.
Zoom in: Take a look at Nashville, where an entity with ties to Neumann recently purchased the 268-unit Stacks on Main for $79 million.
- The percentage of Nashville homes purchased by corporations grew from 17.3% in the first quarter of 2021 to 24.6% in the first quarter of this year, driving up the price to buy in a red-hot market.
- To meet rent demand, Nashville will see its expected apartment inventory rise by 7% from 2021 to 2022 — the largest increase in the country. It remains cheaper to rent than buy in the city, where an average apartment downtown is pushing $2,000.
- Stacks on Main — in slightly cheaper East Nashville — features a saltwater pool, a dog park and valet trash pickup. The most affordable one-bedroom unit right now costs $1,475 per month, according to the complex's website.
The bottom line: With what we know so far, there's little to differentiate Flow from any other real estate developer. And those companies don't purport to change the world with their business model.
Axios' Deirdra Funcheon, Nate Rau, Adam Tamburin and Thomas Wheatley contributed to this report.
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