Coliving opportunity in San Francisco

25k for 12 bedrooms. I’d love to open a coliving space in this building. But is it worth it at a near zero profit margin?

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Here is the link: http://www.120-10th.com/

I’m happy that “coliving” is gaining speed. To me coliving should provide:

– lower prices, and/or flexibility, so greater access
– smaller spaces but more community

Building a model around existing spaces in SF is difficult because demand and rent are so high. Campus Houses was the master tenant for ~30 large houses in Bay Area–I lived in one for a month–and the community was amazing, but unfortunately the overhead was too high to make the model work and they closed down, giving up all the houses.

I built a simple model for the space at 120 10th St., link at the bottom.

I suggest in the model that each bedroom would cost a renter 3k per month. Here is a building nearby that charges similar for their studios, it’s for students and interns only http://www.panoramiclivingsf.com

Included in the price would be the standard coliving amenities:

– month-to-month leases
– fully furnished rooms and community areas
– wifi/cable
– weekly room cleanings
– free drinks and snacks
– community network and events

Unfortunately, even at this price (2500 sounds more reasonable to me), the math does not result in a very profitable business. At best it floats around break even.

**So I’m asking myself, is it worth it at breakeven?

Pros:
– The space might be a nice center piece / proof of concept for building a coliving company
– It provides 12 flexible beds in SF
Cons:
– It doesn’t generate cash
– Airbnbing the space or acting as a small 300/night hotel would likely make more money, or a group of friends could just rent it together

Spreadsheet: https://docs.google.com/spreadsheets/d/1gl1Bg5rLP3MMd34cUsg4QLmprMkSxvaTKRbG048u53w/edit#gid=296268891