Six Peak Capital, which invests in co-living projects with Common, seeks to raise $1 billion in debt and equity to expand its footprint of shared living spaces across gateway markets in the U.S. The real estate private equity firm is seeding the initial funding with properties currently owned or under contract, representing more than 1,000 beds.
The seed assets, with total capitalization expected to surpass $135 million, would boost Six Peak’s total portfolio of co-living properties to more than 2,200 beds and $350 million in capitalization. Six Peak has also identified a pipeline of properties totaling more than 6,000 beds and requiring more than $1.5 billion of debt and equity.
Cushman & Wakefield has been exclusively retained to secure the initial $1 billion in programmatic financing. No funds have yet been raised as the strategy is in the initial stages, the property brokerage informed Multi-Housing News. Details of the seed assets are undisclosed, but the cities and submarkets where the properties are located include Los Angeles (Mar Visa, Del Rey and Hollywood), Chicago (the Loop), Seattle (West Lake, First Hill, Fremont) and San Francisco.
Founded in New York City in 2015 by Brad Hargreaves, Common currently manages 30 buildings across New York City, Chicago, San Francisco, Oakland, Calif., Seattle, Los Angeles and Washington, D.C. The company’s pipeline totals more than 10,000 co-living and traditional residential beds around the world.
An uncommon growth spree
Common is among the leading purveyors of the co-living concept, which is on the rise across major metropolitan areas as the affordability of traditional homes and apartments becomes an escalating concern. The company, which competes with such brands as Ollie, Quarters, and WeLive, offers its members a private furnished bedroom within a fully furnished shared suite, along with community spaces and a range of services and amenities such as weekly cleanings. Members are typically on 12-month leases, but the agreement allows them to transfer between locations in any city.
In April, Common announced a major expansion plan to launch new, ground-up communities in Philadelphia, Atlanta, Pittsburgh and San Diego, with an investment of more than $300 million. The company has also jumped into Canada’s nascent co-living sector, teaming with Dream Unlimited Corp. to open a 225-bed property in Ottawa, Ontario, dubbed Common Zibi.
Six Peak rebranded this month after bagging a strategic investment by the Steyn Group. The company, which formerly went by the name Harriman Capital, made its first co-living investment in October 2017 by sinking $15 million into four properties to be managed by Common in New York City and Los Angeles.