Invest in boutique destinational coliving

Following change in the Hub House purpose and model, this page is currently a mess and being rewritten with a full investment proposition. The goal is to focus on acquiring smaller cheap 'satellite' properties to renovate with a coliving-specific fitout, maxmimising yield and utility. Only discounted use by shareholders will be permitted and without guarantee except where annually agreed. For more details please touch base with jacob@hub.house or Whatsapp.

Purchase, works and operations of property as destinational coliving spaces. A short to mid term hospitality-oriented model at prime rental rates, serving remote workers by offering in-house coworking facilities, alongside adventure and exploration in the surrounding area.

Hub House satellite properties

• cheaper acquistion
• better fitout
• over ^€90^k gross revenue
• under ^€250^k property capex
• over 22^% net yield
• rates 20^% below market
• 1–8 week stays
• coworking for remote work
• 12–18 capacity
• around 350m² floor space
• over 40^% common spaces
• facilitation for great experiences
• towns for vivacity
• nature for adventure

The market

The segment offer is that of the slow-travel workation — a longer getaway for professionals whom can travel whilst also working, taking advantage of off hours for adventure, and specifically those guests seeking to be amongst others for connection and shared experiences.

The audence

1. digital nomads — a niche but growing audience whom intrinsically work away; reliable reoccuring demand, and easy to target, though lower tolerence for high prices ()
• no well established size, but estimates over 40m global
• informal estimates up to 80m if including workations
• over 20% of nomads work with employer recognition and support
2. adventurous professionals capable of remote work — seeking an escape from the city and some invogoration; harder to target yet larger audience with better spending power
• no known size but coworking members closely align as a segment with over 1.5m members in 6800 spaces across Europe
• workations have 11.7% compound growth
• 1650,000 UK remote workers have moved abroad or become digital nomads / slow travellers (LiveCareer)
• roughly 1 in 3 knowledge workers now plans at least one workation trip per year (multiple studies)
• 72% of remote-capable employees in the EU expressed the intent to take a workation (Eurofound/SD Worx)
• 60% of EU "knowledge work" is now hybrid-eligible (McKinsey)
• platforms such as Airbnb report stays of 28+ days now account for a very significant revenue
3. team retreats and retreat organisers, however these introduce issues due to exclusive use, but can be offered out of season

The problem

Changing lifestyles that amongst the audence allow location flexibility…

• seeking participation with others instead of isolation
• flexible stays for an atypical duration
• hotels are expensive, bland and lack common facilities
• AirBnBs have hugely variable facilities
• good workspace is rarely included or involves finding a separate coworking

The solution

Boutique destinational coliving supporting changing lifestyles by offering:

• multiple ergonomic workspaces in the building (casual and quiet/focus)
• good shared facilities (kitchen, laundry, lounge)
• a community amongst like-minded professionals
• organised activities
• a single price / booking for flexible stays

Comparatively

Sits neatly between hotels and lettings:

• significantly lower operations than hotels, higher than rentals
• rates over double rental, half hotels
• moderate churn / turnover (average stay of 1 month)
• 85% occupancy (with strong brand; ex. low season)
• higher investment than rental, lower than hotels

Property acquistions

• small old hotels have low acquisition costs due to no market demand (replaced by AirBnBs)
• slow delivery, due to requiring renovation and fitout works (e.g. new partitions, plumbing, eletrics, finishing, …) however resulting in maximised space use (without destroying existing improvements as in more expensive properties)
• only subsequently suitable for similar uses (hostel/hotel), therefore limited leverageable capital appreciation

The first location — the south of France

• prime tourist destination yet underappreciated amongst digital nomads
• under represented in the category — only 5 spaces (see map)
• well positioned with good access from key European metro markets (Paris, London, Switzerland, Brussels, Amsterdam, …)
• varied envionment and activities, great food
• founder is based and has experience here

Fitout and facilities

• around 50% ensuite rooms, 20% basic rooms, 30% capsules
• smaller private rooms in favour of larger common spaces
• affordably functional and cosy with unique features
• easily maintained and replaced
• multi-station kitchen with multiple fridges and generous storage
• casual coworking plus focus coworking / library (further efficiency by not equipping rooms with desks)
• call booths
• multi-purpose lounge
• outdoor space with BBQ

Accommodation classes cover the breadth of the market ensuring demand reslience, however this varies significantly based upon property layout.

Funding

• €75k comitted from founder
• €25k loan from owner
• time from artisan for renovation lead as equity
• time from founder for renovation labour as equity
• Requirements: €125k

Spend

• property acquition and taxes
• renovation materials
• fitout equipment
• stipends for renovation 'volunteers'
• minibus (2nd hand)
• operational runway (nominal)
• marketing (nominal)

Note: these properties have no notable appreciation — once fitout the property only has resale value to a similar operator (e.g. hostel), however due to renovation the valuation might be leveraged to aid expansion.

Model

This is not leveragable real-estate, but a proposition for smaller atypical properties that are cheap to acquire, convert and operate as high-yield destinational colivings serving remote-workers (and digital nomads).

• integrated property ownership and operations, addressing market demand through direct investment in optimal facilities — few operators plan and invest adequately (including those launching as coliving), thus a significant differentiator
• community facilitation and housekeeping through founder-trained volunteer staff employing sector best practices
• wide accommodation offer spanning lower to mid-upper (potentially also higher)
• 1-week stays permitted addressing city escapes for busy professionals (usual minimum 2 weeks)
• longer stay discounts (better community and reduced onboarding)
• potential additional revenue stream with team retreats (during off season)
• pandemic survivable due to small number of people and longer stays

Little revenue differentiation between high and shoulder seasons, due to a higher level of staff requirements, whilst shoulder and off season residents contribute more to upkeep themselves.

Differentiation

• purpose designed spaces and fitout
• below market rates (initially)
• ergonomic coworking
• high proportion of ensuites
• nature, shops, transit at door
• community focus (training)

Will primarily be the purpose designed common spaces. Very few colivings actually provide fit-for-purpose facilities, e.g. one well known space having 24 residents has a tiny kitchen with a single 4-ring hob, though does have good coworking, yet call booths are not sound proofed. Additionally many do not offer ensuites which are strongly preferred.

In addition it is uncommon to have multiple spaces for a given use, e.g. when residents have a fun social gathering but the coworking is adjacent, work must stop.

Other spaces highly variable community experience across the year as they do not train their volunteers, with a small investment in this, it will be better maintained and more consistent.

Please refer to individual property reports for specific location details and differentiation.

Revenue

• VAT exempt
• 2-month closure per-year (subject to location)
• 2 units reserved for staff (subject to capacity)
• 40% occupancy in low season

Marketing

• direct interaction — on forums and in online groups, undertaken by volunteer-staff posting unique content (this is the most common method used by coliving spaces, however few produce content and only post offers/availability)
• platform leverage — promotion through the founder's own coliving directory site
• residency programmes — offering free stays to those having a strong network
• coworking space managers
• capable of enhancing the community with content (talks, workshops, etc)
• indirect networks
• guest satisfaction, frequently make recommendations as there are few great colivings
• facilitator training, will often spend time at other spaces
• advertising — reddit / facebook targetting for digital nomads and coworking space users
• sponsorships — may sponsor digital nomad events

Once a strong brand is established active promotion is not required as demand is quickly self-fulfilling.

Operations

• low-cost staffing backed by founder training
• residents significantly look after themselves
• dedicated community facilitator (with accommodation)
• dedicated community facilitator (with accommodation)

Competition

Growing to multiple locations with below market rates and well facilitated community experiences building a loyal membership returning amongst the locations.

The format is essentially that of a hostel with long stays no churn from nightly guests, equipped with dedicated separate live work spaces, usually comprising an open plan kitchen-dining-lounge, a casual workspace, and a library lounge focus workspace. Accommodations being balanced between ensuites private rooms (ideally at least 1 premium), and capsules/pods, thus enabling diversity amongst members, and addressing market breadth. This approach results in a fit-for-purpose building ideally specified for remote-worker use in interesting locations that are attractive to keep visiting time and time again. With rates significantly discounted to encourage monthly stays, operations are low overhead. The sole notable operational matter is facilitator/staff/volunteer training, which the founder can undertake on a rotational basis. The founder will retain 1 room for full time use during the startup phase and ensure ongoing operations such as training and quality assurance during volunteer changeovers.

Mutualised fractional use — this has been withdrawn and is unlikely to be revisted however if interested do reach out to stay informed should a combined coliving–cohousing project open up where individual units can be owned outright or for fractional use. The approach would enable a group of backers to purchase and fitout a building, offering guarenteed use and/or dedicated units as a larger hub property, only partly operating commercially, the majority being at-cost. About this.

operational efficiency low-churn results in reduced onboarding and fewer changovers guests/members have lower expectations (except for community faciliation) and also contribute towards cleanliness collectively staff will be volunteers with a stipend and training, in addition to the more typical free accommodation; resulting in better retention the founder will be present for each staff rotation, with slight overlaps for redundancy market breadth targetting the full market potential whereas most colivings exclusively target digital nomads (famously cost sensitive, yet still coliving enthusiasts) the wider market includes most remote-work capable professionals we'll utilise coworking manager residency programs to reach the users of coworking spaces whom are prime candidates unlike nomads leverage the founder's coliving.community site

What's a coliving hub?

🏡

A shared home and workspace, where we also share some of our purpose and learnings.

🛤

For a workation to escape routine, as a retreat to dig into projects, or as a base.

👩‍💻

Be you an entrepreneur, remote worker, digital nomad, a creative, or anything else!

The founder — Jacob Jay

• ex. technical director with a small London marcomms agency
• created the first blended+hybrid coliving+coworking
• ran for 4 years as a social enterprise
• empty building given basic fitout
• 12 beds, 10 desks, event space, onsite cook
• bespoke tech for member management
• after 18 months solely responsible, identified and handed operations over to local director, yet visited part-time
• aided a partner to open a co-branded location
• many diverse tech/UX roles with startups
• undertaken renovation in France, reselling at 220% in #2 tourism destination
• actively tracking the coworking and coliving movements since their emergence
• guest at many coliving spaces and p/t digital nomad
• started a (pre-pandemic) crowdfunding campaign to renovate a mill in Portugal as a coliving; met the town council but ultimately rejected
• creator of the coliving.community directory with 400+ manually classified spaces

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Example properties…

Due to a huge slump in sales (2000+ agents closed) there's good choice of properties, even fully functional hotels for under €0.5m. Most need works such as replacing windows with double-glazing, but allows optimisation of layout and facilities. Having done a bit before I'm ready to get my hands dirty again.