Adam Neumann’s new venture targets prime residential real estate

Flow — WeWork founder Adam Neumann’s newest company that aims to disrupt the residential experience — has designs in some of America’s most competitive real estate markets.

Why is this important: At its beginnings, Flow has already acquired thousands of residential units in Atlanta, Nashville and Miami — cities where residents already struggle to find reasonably priced homes to rent or own. Markets in these places have been shaken by business investment.

  • Flow announced on Monday that it had secured a $350 million investment from prominent Silicon Valley venture capital 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 said. reported.

What to expect: Details on the company’s exact business plan remain scarce, but Andreessen Horowitz said in a blog post that Flow aims to”[connect] people by transforming their physical spaces and creating communities” within their homes.

  • Earlier this year, Tim Peterson of Florida-based Altman Cos. was hired to manage some of Neumann’s new properties in Miami, suggested to Bisnow that his vision was to create a community atmosphere.
  • He said that could potentially be nurtured by programs like fitness events, a speaker series, or volunteer events.

The big picture: Flow’s top three cities have already seen their housing markets transformed by companies gobbling up single-family homes and turning them into rentals, driving up house prices and rents.

Enlarge: Take a look at Nashville, where a Neumann-related entity recently bought all 268 Stacks on Main units for $79 million.

  • The percentage of Nashville homes being purchased by businesses has risen from 17.3% in the first quarter of 2021 to 24.6% in the first quarter of this year, driving up the purchase price in a booming market.
  • To meet rent demand, Nashville will see its projected apartment inventory increase 7% from 2021 to 2022 — the largest increase in the nation. It’s still cheaper to rent than to buy in town, where an average downtown apartment push $2,000.
  • Stacks on Main — in slightly cheaper East Nashville — has a saltwater pool, dog park, and trash pickup service. The most affordable one-bedroom unit currently costs $1,475 per month, according to the resort’s website.

The bottom line: With what we know so far, there isn’t much to differentiate Flow from any other real estate developer. And these companies don’t claim change the world with their business model.

Deirdra Funcheon, Nate Rau, Adam Tamburin and Thomas Wheatley of Axios contributed to this report.

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