Adam Neumann, who founded coworking giant WeWork before stepping down as CEO when his fortune embittered, has a new business in progress: owner of an apartment.
Entities linked to Mr. Neumann quietly acquired controlling stakes in more than 4,000 apartments valued at over $ 1 billion in Miami, Atlanta, Nashville, Tenn., Fort Lauderdale, Florida, and other U.S. cities, according to court, company property and records and people familiar with the transactions. Many of these investments have taken place over the past year.
Mr Neumann has shared with friends and associates his ambitions to start a business that will shake up the rental housing industry, according to people familiar with the matter.
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It has not been possible to learn exactly how he plans to achieve this goal, and his investments so far have largely been in traditional apartment buildings. Mr Neumann said he wanted to create a widely recognizable apartment brand with amenities, according to one person who was part of those conversations. His Nashville property, the 268-unit Stacks on Main, has a saltwater pool, dog park, and garbage collection, according to the building’s website.
Mr Neumann is hoping to appeal to the same type of young professionals he drew into hundreds of collaborative workspaces when he was CEO of WeWork, people familiar with the matter said. Its flexible office space was renowned for its offerings such as free craft beer and fruit water.
DJ Mauch, Mr Neumann’s family office partner, said: “Since spring 2020 we have been excited about multi-family apartments living in vibrant cities where a new generation of young people increasingly choose to live, the kind of cities that redefine the future of life. We are delighted to play a role in this future. ”
Mr. Neumann has also invested in several startups, according to a person familiar with the matter.
Mr. Neumann co-founded WeWork in 2010 and raised more than $ 10 billion for a company formerly valued at $ 47 billion, persuade investors to market it as a tech company despite its real estate roots. He also launched WeLive, designed as a network of buildings where people can rent rooms in furnished and shared apartments. The company opened apartment buildings in New York and Virginia, but WeWork closed WeLive after Mr. Neumann left.
The 42-year-old entrepreneur left the company at the end of 2019 after plans for a initial public offering of shares failed in the midst of worries on his management style and heavy losses. WeWork, now publicly traded, has a market cap of around $ 7 billion. This valuation is more in line with real estate companies than fast-growing technology companies.
Mr. Neumann got rich working at WeWork and uses his own funds to buy shares in apartment buildings, according to a person familiar with the matter. When Mr Neumann was CEO, he and his co-founder sold a total of more than $ 500 million in shares, much of it at higher prices than today, according to documents and people familiar with the sales. . To induce Mr. Neumann to relinquish his control of the company, WeWork’s majority owner SoftBank Group Corp. paid it nearly $ 200 million for consulting and other fees and bought it $ 578 million of shares, according to WeWork documents.
Mr. Neumann helped fuel the coworking craze in the United States through the rapid expansion of his business. At one point, WeWork occupied more office space in Manhattan than any other business. But he follows the crowds in the already fashionable apartment industry.
The sector has seen increasing investor interest since the start of the Covid-19 pandemic, particularly in the booming Sunbelt. Rents are rising in many cities, alongside rising household incomes and a housing shortage that analysts say is not going to go away anytime soon. Cities like Nashville and Miami also attract migrants from the northeast in search of warmer weather, cheaper housing and lower taxes.
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In 2020, Mr. Neumann acquired a significant stake in Alfred Club Inc., a company that offers concierge services such as grocery and laundry pickup and drop-off in residential buildings.
Its real estate, which includes two apartment buildings in Atlanta, is mostly newly built properties with over 200 units and many common amenities.
In Fort Lauderdale, an entity linked to Mr Neumann owns the Las Olas company, court records show. The 639-unit apartment building includes a co-working space, a putting green and a hair salon, according to the developer’s website.
In downtown Miami, Neumann recently signed a deal to buy a controlling stake in the 444-unit Caoba apartment tower, valuing the property at around $ 200 million, according to a person familiar with the matter. An entity linked to Mr Neumann also owns the neighboring 387-unit Yard 8 building, according to court records.
Mr Neumann has also invested in suburban apartments, where demand has increased as remote workers leave crowded city centers in search of more space. He owns an interest in a building in Decatur, Georgia, according to public records, and another in Norwalk, Connecticut, a person familiar with the matter said.