Revenue From Multifamily

Multifamily remains one of the best-performing commercial real estate asset classes for investors. It performs especially well in the nation’s top 20 multifamily markets, where the average revenue per occupied unit was $1,918 recently — or about 22 percent higher than the average for all markets. Also, Mark Dixon runs the largest flex operator in the world, IWG, and he talks about the future of coworking — and what rival WeWork got wrong.

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— Tom Acitelli, Co-Deputy Editor

Multifamily Securitizations Come Into Sharper Focus

Isolating the top 20 markets, the average revenue per occupied unit was $1,918 — roughly 22 percent higher than the average for all markets. MSAs located in California accounted for seven (35 percent) of the top 20 markets with the highest revenue per occupied unit. Among the top MSAs in California were San Jose and San Francisco, both ranking in the five highest-grossing multifamily markets.The Bridgeport-Stamford-Norwalk, Conn., MSA had the highest average revenue per occupied unit in 2021 with $2,648. Operating leverage averaged about 45 percent with average operating expenses per unit of $1,203. The Bridgeport market barely edged out the New York-Northern New Jersey-Long Island MSA, which had average revenue per occupied unit of $2,644 — less than 1 percent lower than Bridgeport.

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IWG CEO Mark Dixon On ESG, Tertiary Markets and WeWork’s Bluster

Before there was WeWork — and Industrious and Daybase and Knotel and Convene, etc. — there was Regus and Servcorp. It was they that created the template for flexible office spaces and leases that WeWork especially purported to break. Even with WeWork’s famously botched IPO and a pandemic seeming to upend the model, flexible office space (aka coworking) remains a hot area in commercial real estate, with the aforementioned companies and others vying for the same worker who doesn’t want to just go back to the same old office. IWG — short for International Workplace Group, parent company and creator of Regus and Servcorp, several other flex office brands such as Signature, Spaces and Basepoint — is one of the major players. IWG has decided that now is the time for hybrid work, and with 1,100 U.S. offices — more than WeWork — it is expanding into tertiary markets and suburbs to be closer to where people live. It claims to serve 83 percent of Fortune 500 companies.

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