Adam Neumann wants to become owner again

“I’m here to collect your rent check. ”
Photo: VCG / Visual China Group via Getty Images

Since photo of Adam Neumann Barefoot with a Rabbi and Pizza in the Hamptons circulated this summer, observers wondered what was going on with the disgraced WeWork founder. A few months earlier, an “insider” had declared New York To post that Neumann had “big plans”, the scope of which “involves what has happened in the world because of the pandemic”. And now these big plans have been revealed: Neumann becomes a apartment owner.

The Wall Street Journal reports that Neumann-related entities have acquired controlling stakes in more than 4,000 rental apartments in southern cities including Atlanta, Nashville and Fort Lauderdale, a portfolio valued at more than $ 1 billion. Which technically implies what happened in the world because of the pandemic – rental prices are soaring across the country and a lot of people moved to smaller towns – although it’s kind of a disappointing comeback for the man who once envisioned a global We Empire: WeWork (offices), WeLive (apartments), WeGrow (a school), Rise By We (a gym), WeBank, WeSail, even WeMars. by Neumann other ambitions include becoming Prime Minister of Israel and living forever.

Then again, WeWork, once considered a particularly magical tech unicorn, turned out to be a sublet company that lost a lot of money. At least it did it in spectacular fashion, with tequila-fueled rascals, wild investment ($ 13 million for a company that made wave pools for indoor surfing), and rapid growth (it was at one point New York’s largest private office tenant). It seems safe to say that when Neumann himself finally comes out of his near-isolation to talk about his new venture, there will be a lot of self-considered rhetoric (WeGrow once sworn to revolutionize primary school by “raising the collective consciousness of the world by developing happiness and releasing the superpowers of every human being”). In fact, a partner in Neumann’s family office already offers distorted New Age quotes, telling the Newspaper that they are “excited about multi-family apartment living in vibrant cities where a new generation of young people are increasingly choosing to live, the kind of cities that are redefining the future of life.”

What does this mean exactly? Neumann apparently has “an ambition to create a business that will turn the rental housing industry upside down.” And how does he plan to do that? By bundling services and amenities, it seems, and charging for them. Which is familiar ground for Neumann – WeWork’s business model was all about making money by raising office rent in exchange for perks like nice design, flexible rental terms, and craft beer. WeLive has done much the same with shared furnished rental units. It is not known how he planned to do it with Mars.

The details of Neumann’s plans remain opaque, but the properties he invests in are fairly traditional luxury apartment complexes with 200 or more units and plenty of amenities: saltwater pools, putting greens, dog parks, outdoor spaces. of co-working (!) and (less traditionally) valet garbage cans and hairdressing salons on site. Last year, according to the Newspaper, he acquired a significant stake in Alfred Club, Inc., which provides concierge services such as grocery depot and laundry. (The company rotated years ago, from providing virtual butler services to tenants to providing property management services to landlords. Common, WeLive’s former coliving rival, has also leaned in his role of property manager.)

Renting traditional apartments in a well-staffed full-service building is not exactly a new concept. Neither could invest in the rental market at this particular moment to be described as visionary from a distance. But then the sky blue aspects of WeWork didn’t really work. Overpricing for services and amenities has done it, and it’s a proven business model. Neumann, who left a billionaire after being forced out as CEO of WeWork, this time would invest his own money.

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