What the Next Act for WeWork Co-Founder Neumann Means for Senior Housing  

Last week, news broke that entrepreneur Adam Neumann — of WeWork fame, or infamy — now wants to transform residential real estate. And he has $350 million from Andreessen Horowitz backing his venture, dubbed Flow.

Details about Flow are sparse, and WeWork’s tailspin made Neumann look more like a pariah than a visionary. Still, I think senior living owners and operators should consider why Neumann believes that residential real estate is ripe for disruption, and keep tabs on his vision for how to create a new model.

For all the folly involved in WeWork, Neumann’s vision did shake up commercial real estate, and it’s possible that his next chapter will end more successfully. Certainly, that’s what Marc Andreessen is banking on.


“It’s often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann,” Andreessen wrote last week. “We understand how difficult it is to build something like [Flow] and we love seeing repeat-founders build on past successes by growing from lessons learned.”

In this week’s exclusive, members-only SHN+ Update, I offer analysis about how the vision for Flow suggests how senior housing — particularly active adult and independent living — might need to evolve, including:

  • Expansion and innovation of ownership models such as co-ops
  • More effective, tech-driven ways of fostering purposeful lives and community bonds for residents
  • Innovations to enable more mobile lifestyles
  • The possibility that Flow could target older adults directly

Own vs. rent

In the blog post explaining his firm’s huge investment in Flow, Andreessen identified several reasons why he believes a “seismic shift” in residential real estate is needed.


Among these factors, he sees several problems with the traditional rental model — problems that the rent-based U.S. senior living industry should consider, and that some owners and operators already are making moves to address.

For one, Andreessen pointed out that rents are soaring around the country, and “structural shortages in available homes” and demographic trends — such as young people staying single and renting for longer periods of time — could make this an enduring issue.

Just two days after Andreessen’s blog post went up, a Next Avenue headline proclaimed: “Rising Rents Are Squeezing Older Adults.” The article highlights examples of rents surging by up to 40%, and older adults “giving up on renting altogether.”

Andreessen also emphasized that people can “pay rent for decades and still own zero equity — nothing.” This might seem more like a problem for young renters than older people, but consider that the booming active adult rental market is aiming for ever-younger residents, while lifespans are increasing. It’s certainly conceivable that older adults could become multi-decade renters.

And Andreessen argued that typical rental models do not foster pride of place for residents, writing: “ … Someone who is bought in to where he lives cares more about where he lives. Without this, apartments don’t generate any bond between person and place and without community, no bond between person to person.”

I believe that all these dynamics are driving some senior living trends that are gaining steam and will continue to accelerate in the years ahead. Among these trends, the rise of co-ops might be the most notable.

Co-op residents typically buy into a corporation that owns the building, allowing them to lease a unit. They usually pay a monthly assessment fee and participate in the building’s operations and governance.

Senior housing co-ops were on the rise even before Covid-19, and they performed well during the pandemic. Edina, Minnesota-based Ebenezer manages more than 60 senior co-ops, and leaders with the company saw how the strong sense of community buoyed residents throughout the last two years, CEO and President Jon Lundberg recently told SHN.

“When the people that live in the building are the owners of that building, when they are truly tied in and bought into the operation, they think differently about their neighbors and how they interact,” he said.

Now, Ebenezer has decided to develop senior co-ops under a new brand called Estoria Cooperatives. Another Twin Cities-based company, Ecumen, also is developing co-ops under its Zvago brand — an effort launched prior to the pandemic. Also based in the Twin Cities, United Properties is expanding its co-ops as part of a plan to triple its senior housing portfolio.

Minnesota is a hotbed for senior living co-ops, but in recent weeks, Iowa-based developer Ewing Properties announced plans to expand its Vintage Cooperative brand beyond the state.

And Ewing is experimenting with the model. The company is building communities of detached patio homes so that residents can blend a single-family living experience with communal amenities and socialization. And the company offers various pricing options, such as allowing residents to put more or less money down upfront to purchase their ownership share.

I believe that co-ops will continue to gain popularity and expand around the country, with the model continuing to evolve. Neumann’s Flow could put booster-jets on the trend, if the venture adopts a co-op structure, as one analyst speculated to GlobeSt.com.

That publication suggested that Flow will likely “innovate” on the typical co-op model, perhaps by creating “some corporation that owns lots of places across different geographies. Consumers would pay a fee that was part rent with another part going to an equity share so they are owners and renters.”

Whatever Flow ends up being, I think the point remains that typical ownership and rental models for residential real estate might no longer meet the market, and disruptors are already seeking alternative structures — senior housing must be prepared to keep pace.

Social ties

In his blog post, Andreessen described the typical renter as having a “soulless experience,” arguing that people are hungry for a sense of community that renting does not provide:

“ … Do you even meet your neighbors, much less have any friends in your complex? Does it feel like home, or just a place to sleep? Are you proud to bring friends and family to visit, or hesitant?”

I believe many senior living providers would be quick to say that the experience in their communities is totally different. Socialization is routinely cited as the single greatest value prop for the industry, and the main differentiator between communal living versus remaining in a single-family home.

But in recent years, some providers have flagged that they — and the industry as a whole — could be doing a much better job at intentionally fostering social connections and elevating the sense of community within their buildings through new approaches to engagement and programming.

Technology has a vital role to play here, in enabling providers to identify residents’ goals and interests, connect residents with shared interests, drive more resident-led social and engagement opportunities, and create more specific activity programs for each community in a portfolio.

Holiday Retirement — now Holiday by Atria — is one provider trying to achieve these goals. Last year, then-CEO Lilly Donohue told me about how the provider is working with tech company Cubigo to create the Holiday365 platform to elevate and personalize resident engagement.

Cubigo also is the tech behind Juniper Communities’ Catalyst, which CEO Lynne Katzmann recently described as “concerted program for lifestyle management” by breaking down silos between hospitality, care and management — all with a more personalized and wellness-driven focus for each resident.

As the “We” in “WeWork” highlights, community-building has been one of Neumann’s guiding principles, and I think we can expect a similar approach in how he wants to disrupt residential real estate. So, Flow could break new ground and change expectations about how to put community into communal living, in the vein of what Holiday and Juniper already are pursuing — and I believe every senior living provider should be considering similar moves.

As Andreesen put it, such disruption “requires combining community-driven, experience-centric service with the latest technology in a way that has never been done before to create a system where renters receive the benefits of owners.”

Mobile lifestyles

There are some indications that Flow will enable more mobile lifestyles, and I think this is another element that senior living providers should think about incorporating in the years ahead.

Andreessen brought this up in his blog post, writing that people are “stuck” in most home ownership models: “You can’t move, even if your economic opportunity or life path wants to take you somewhere else.”

Obviously, people move all the time for personal and professional reasons, so there is speculation that Andreessen really means that it should be easier for people to have homes in multiple locations.

GlobeSt.com’s Erik Sherman suggested: “The business structure would allow [residents] to move from one locale to another with the rent portion changing, depending on the specific building and city.”

This is a concept that some senior living providers already are introducing. Independent living provider Revel has rolled out Revel Seasonal Residences, which allows residents to live for periods of time at multiple Revel locations. There also are various senior living-at-sea efforts, while Switzerland-based The Embassies of Good Living envisions members as “global ambassadors” commuting between Embassies residences in some of the world’s largest cities.

The concept of older adults as “snowbirds” migrating seasonally between homes might be a cliche, but obviously this lifestyle has held appeal. I believe that senior living communities can do more to support, say, the desire of older adults to live close to family for part of the year and then head to a different location — perhaps somewhere with a warmer climate, or the town where they attended college — for a few months.

Finally, I think senior living professionals ought to consider the possibility that Flow could target the older adult market specifically. Already, Neumann has purchased more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville, according to The New York Times. These are hotspots for senior living, and it doesn’t take a huge leap of imagination to picture some residences branded as, say, “FlowSilver,” with amenities and services geared toward older residents. But even a typical Flow building might hold appeal for multiple generations of residents and create competition for active adult communities.

Obviously, it’s early days for Flow. The company’s website contains no information as yet. Senior living professionals can do little except wait and see what Neumann is planning. But even if Flow flops, I think Neumann and Andreessen are shining a light on real issues in rental real estate that senior living owners and operators should take seriously.

In other words, simply going with the flow could lead to the industry being disrupted by Flow, or other startups that follow in Neumann’s wake.

Companies featured in this article:

, , , , , , , , , , , , ,