As millennials graduate college and move into hip neighborhoods in expensive cities, affording the rent is becoming an increasing problem. Some companies think they have solved that problem in the form of adult dorms. Adult dorms are a growing market in cities like New York and San Francisco, and venture capitalists have taken an interest.  

The Wall Street Journal explained that venture capitalist groups like Fidelity Investments and Maveron are hopping on board and providing startup funding to these dorms for grown ups, which offer fully furnished apartments with amenities like free Wi-Fi, cleaning services and more.

The catch is that the actual living spaces are very small. Each apartment comprises a minimal amount of square footage, and the rest of the building space is taken up by communal kitchens, lounges and other areas that promote socialization and friend-making. For young people who have moved to a new city, though, the ability to easily make new friends can be very appealing. It might be worth the small personal living space, especially considering the other amenities involved. Many of these adult dorms even host weekly group dinners and other fun events. 

Co-working organization WeWork is currently a front runner in this category. According to Fast Company, its WeLive model is appealing to tenants because it offers furnished apartments, free Wi-Fi and does not require tenants to sign long-term leases. WeLive spaces also exist in trendy neighborhoods and are cheaper options than standard apartments. WeWork CEO Adam Neumann touted the reasons young people will love WeLive. 

"We're not just going to give them the best price, which we will," Neumann said. "And we're not going to just give them flexibility, which we will. But we're going to give them a social layer of community that has never existed before."

Fast Company reported that WeWork projects it will have 34,000 residents living in 69 WeLive buildings by 2018.

Will it really work? 
The Wall Street Journal reported there are some risks associated with these ventures, namely that the business model must be a perfect balance between prices low enough to make young people want to move in and high enough that they appeal to landlords over alternate living concepts. Another possibility is that young people simply will not want to shell out about $1,800 per month (which is what some companies charge) to live in such a tiny space. 

Still, companies like WeLive, and other co-living startups Common and Stage 3, are springing up, determined to succeed.  

Content presented by Bridge Bank, offering flexible, customized solutions for entrepreneurs. 

  • Recent News
    Bridge Bank company logo red black and white
    Bridge Bank Extends $2MM Credit Facility to Miva, Inc.
    Bridge Bank company logo red black and white
    Bridge Bank Extends Venture Term Loan to Deep Lens, Inc.
    Bridge Bank company logo red black and white
    Bridge Bank Expands Capital Finance Group with New Managing Director Timothy Carstens
    Bridge Bank company logo red black and white
    San José State University Economic Summit Presented by Bridge Bank Goes Virtual
    Bridge Bank company logo red black and white
    Bridge Bank Extends Credit Facility to YES Leasing
  • Recent Insights
    Leaving LIBOR
    Leaving LIBOR: 4 things to know about changing interest rate benchmarks
    california-2020
    Regional Intelligence Report Series: California Outlook
    south-bay-2020
    Regional Intelligence Report Series: South Bay Outlook
    CybersecuirtyWebinarInsight Article324x259819
    Protect Your Data: The Cybersecurity Webinar
    Protect Your Organization Against Data Breaches and Cybercrime Scams
  • Get Started