Propmodo Daily

By Franco Faraudo · Apr. 22, 2024

Greetings!

Fair or not, Adam Neumann’s failures at WeWork forced many to question the value of the co-working concept. Now we are seeing a similar thing happen with co-living. In today’s email, we look at the rise and fall of Rishi Kapoor and how his corporate misdeeds might cast a shadow on the still blossoming co-living industry.

Also, despite declining university enrollment nationwide, top schools face increasing housing demand. In a new article, we examine how universities are tackling this with off-campus developments, attracting major investment in the student housing sector.

Like property data? Join our Propmodo Live webinar on May 7th, where we will explore how some cities are thriving despite low office occupancy. Register for "Which Cities Are Still Thriving Even With Low Office Occupancy?"

This week in Propmodo Technology, sponsored by investment management platform InvestNext, we focus on asset and investment management trends. We'll discuss AI's role in investor relations, the emergence of real estate DAOs, and how tech platforms empower investor growth.

Now, let's dig in!

Co-Living Has Its Own Neumann-Esque Fall From Grace

WeWork, once the world's most valuable startup, is now bankrupt. While the company's downfall has multiple causes, many point directly to its founder, Adam Neumann. Neumann, who co-founded WeWork and helped pioneer modern co-working spaces, also implemented a number of concerning strategies. These included appointing his wife and close associates to executive positions, acquiring the company name himself and then selling back licensing rights, and leasing office space from buildings he owned. When WeWork pursued an IPO, these questionable practices came to light, causing a stock plunge and ultimately leading to Neumann's ousting.

Now, we are seeing something similar happening in co-living. One of the early co-living pioneers is the real estate mogul Rishi Kapoor (not to be confused with the famed Bollywood actor of the same name). He was sued earlier this year by the SEC for his misuse of investor funds for his two co-living concepts, Location Ventures and Urbin. He has since lost control of both firms and is now facing foreclosure on his other real estate assets, including a development site in Miami Beach.

There are many differences between Neumann and Kapoor. While Neumann's mismanagement of WeWork is undeniable, Kapoor's actions were arguably far worse. Not only did Kapoor illegally shift more than $60 million between entities in a process described as showing "complete disregard for corporate formalities," but he also lavishly spent company money on yachts, luxury cars, and even a $10,000-a-month "consultancy" with Miami's mayor.

However, there are similarities as well. Both Neumann and Kapoor are well-connected, charismatic businessmen whose success ultimately went to their heads. Sadly, these failures have damaged the reputation of their respective industries. WeWork's fall led to a more critical perception of co-working's true value beyond the potential for ancillary building revenue. Likewise, Kapoor's misconduct has tarnished the co-living concept.

Co-working and co-living will undoubtedly continue long after these figures are forgotten. Yet, their actions represent a significant setback in the path toward widespread adoption of these new real estate models. Perhaps these dramatic failures are necessary for achieving eventual, universal acceptance. Or, they may simply serve as cautionary tales about the dangers of unchecked ego when pioneering a new industry.

Groundbreaking

Insider Insights

Overheard

Propmodo Technology: Asset & Investment Management

Reach over 70,000 commercial real estate professionals when you collaborate with Propmodo. For info, email [email protected].

Popular Articles

Are You Enjoying This Newsletter?

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

📧 Forward it to a friend and suggest they check it out.

🔗 Share a link to this post on social media.

🗣 Have ideas for future topics (or just want to say hello)? Share your feedback and tips at [email protected] or connect with us on X through @propmodo.

✅ Not subscribed yet? Sign up for this newsletter here.

📫️ Please add our newsletter email, [email protected], to your contacts to make sure you don’t miss any updates.

Explore Propmodo

• Read exclusive articles about a variety of topics, including Real Estate, Workplace, Buildings, and Development.

• Browse our collection of interactive Propmodo Research e-books.

• Sign up for upcoming Propmodo Live Webinars or watch past Propmodo Live videos on-demand.

• Dive into Propmodo Technology articles, podcasts, and short videos about the future of commercial real estate.

Enjoy reading about trends and innovation in commercial real estate? Subscribe to Propmodo.com for unrestricted access to reliable, data-driven journalism and exclusive insights available only to subscribers.

Interested in sponsoring this newsletter? Email [email protected]