Properties that are mixed-use residential and commercial are nothing new. But including live-work apartments and co-working spaces into multifamily projects is definitely a new, growing trend.
A live-work apartment basically has an office space baked into its design. A co-working space is a shared workspace that could be located within a multifamily building and be part of that building’s overall community, or it can be located in a separate, standalone structure.
The New York Times reported that the nation’s largest multifamily operators, Avalon Bay Communities and Equity Residential, have been adding work and meeting spaces to their buildings for the past few years. The pandemic protocols of 2020, which sent a majority of U.S. employees to work remotely, has only increased the desire for work-from-home opportunities.
One company, Common, the largest player in the co-living space, is taking advantage of the trend. Over the past few years it has been partnering with municipalities to bring about new live-work communities. Common is a leading real estate brand and tech-driven operating platform that designs, leases and manages multifamily properties. Its live-work spaces, about 4,000 units, are open in nine cities, mainly on the coasts.
The COVID Pivot
In March, 2020, Jim Costanza of Costanza Enterprises, an asset management and real estate development company; developer Peter Landers; and investor Rob Sands, CEO of Constellation Brands, all based in Rochester, NY, had purchased and planned to renovate the Thomson Reuters building, an iconic downtown landmark. Then COVID hit.
“It changed everything for us,” Costanza said. “We’d always contemplated a mixed-use space with conventional apartments. But then the commercial market shut down almost overnight.”
The project included the adaptive reuse of six buildings, originally constructed in the early 1900s, with nearly 200,000 gross square feet, along the Genesee River in the heart of the city.
At the same time the Rochester partners were brainstorming solutions, they came across Common’s Remote Work Hub request for proposals (RFP) competition. The Rochester partners entered the competition, along with 27 other entities from across the nation.
Ultimately Common chose “A 2021 Revival: The Aqueduct in Rochester” and four other finalists: NOLA Workstyle, New Orleans, La.; Under the Radar Gem, Bentonville, Ark.; The Remote Work Destination, Ogden, Utah; and Placemaking Perfect, Rocky Mount, N.C. Finalists and winners attended design and development workshops with Common’s architecture team, Common Studio.
The Rochester winners collaborated with local architect Craig Jensen to develop individual apartments with office spaces and co-working spaces for residents and non-residents.
Affordable And Inclusive
The Aqueduct plan calls for 115 apartments spread over four of the six buildings. (These are known as the Aqueduct, Herald, Bindery and Race buildings.) There also will be nearly 49,000 square feet of retail, storage and amenity space located in the Aqueduct, Herald and Bindery buildings.
The Aqueduct building will have retail/office space on the first and second floors and 65 apartments on floors three through seven.
“Based on our review of the market, we’ll have micro-units, studios, and 1- and 2-bedroom units,” Costanza said.
Starting rents will be around $900 in a shared suite and up to $1,800 for two bedrooms.
“We’re trying to keep it affordable and inclusive to attract a broad market,” Costanza explained.
The design proposal keeps the buildings’ historic character, including interior exposed brick and timber and barrel ceilings. The Mercury building will house the co-work hub, with private, conference and small breakout rooms, as well as amenities such as a rooftop terrace, fitness and yoga studio, juice bar, lounge areas and game rooms.
The first floor of the Montgomery building is slated to be used as a public entertainment venue.
Although there are some individual co-work facilities that already exist in Rochester, this mash-up of living space and remote work is a new offering for the city. The partners plan to invest $27 million to redevelop the six-building campus.
How Common is Penetrating the Market
Common Senior Director Matt Micksin said, “We originally looked at the RFP to address the clear remote-work trend that was already in place but which dramatically advanced during the pandemic. Rather than create a spaceship that lands somewhere, we created the RFP process to bottom-up find collaborators across diverse markets and developers.”
When evaluating the Remote Work Hub RFPs, Micksin said Common looked at several metrics that captured what was going on at the highest level in the city and the project itself.
“What’s compelling about the market; is it a destination that can draw tourists already or does it have a compelling economic story?; the vision for project; what’s already in place; and the track record of the submitters, their relationship to the city, what they bring to the table and to the various stakeholders.”
While Common is involved in project design, the company also has an in-house leasing and marketing team. They help bring in potential residents and act as property manager. Common relies on the most-up-to-date technology.
“In coastal properties in New York City and L.A., the target demographic is millennials and young professionals who consume through mobile phones,” Micksin said. “It’s a mobile-first experience.”
What’s Next for Rochester
Demolition and infrastructure improvement on The Aqueduct project began in February. This summer they will break ground on a parking lot expansion. They hope to deliver apartments by Q2 and Q3, 2022.
Costanza sees the project accomplishing several goals. The apartments will attract local people who may be feeling the effects of remote work isolation, as well as people from out of town who, because of the flexibility of remote work, are flocking to mid-size, more affordable cities. It may also keep students in town after graduation; the Rochester area is home to a half dozen institutions of higher education.
“It also presents a great opportunity to activate the west side of the river,” Costanza said.
The city of Rochester is engaged in a huge overhaul that includes filling in its inner loop roadway and building housing, and there’s a ROC the Riverway plan to create a promenade, enhance trails and parks, and upgrade riverfront facilities. Common’s live-work competition has extended an additional boost to downtown development at just the right time.