Plans For Adam Neumann's Miami Apartments Sound A 'We' Bit Familiar

On Tuesday, The Wall Street Journal reported that WeWork co-founder Adam Neumann has been quietly scooping up $1B worth of multifamily properties, including several apartment projects in South Florida. 

A Florida property manager has been tapped to handle operations at two of Neumann's Miami buildings, where a key focus will be developing a sense of community. 

Neumann famously led WeWork to a whopping $47B valuation in 2019 by playing up a communal vibe.

“We're fortunate that we've got very forward-thinking and outside-the-box-thinking owners that want to disrupt the status quo and provide something above and beyond what the standard property management or apartment living is,” said Tim Peterson, chief operating officer and chief investment officer at Boca Raton, Florida-based Altman Cos.

His firm’s property management division, Altman Management Co., announced Tuesday it has added two apartment buildings to its management portfolio, now called Caoba and Yard 8. Those are part of Neumann’s new venture, which Peterson said is tentatively being called Future of Living. That phrase is also a tagline for Alfred, a concierge-services startup in which Neumann reportedly invested.

Caoba means “mahogany” in Spanish. The building, which opened in 2019, is a 43-story, 444-unit tower that’s part of the 27-acre, multibillion-dollar Miami Worldcenter development in Downtown Miami. Developed by Falcone Group and CIM Group, it is 98.8% leased, with rents running from $2,940 to $4,570, according to Apartments.com.

Yard 8 is a 387-unit building in the Midtown section of Miami, a walkable district anchored by a Target and trendy restaurants and shops. Yard 8 was developed by Wood Partners and also opened in 2019. It is 98.6% leased, with rents from $2,253 to $11,530.

Peterson said a sense of community at the properties could be encouraged through programming. Specifics haven't yet been decided, but activities could potentially include fitness events, an artist-in-residency program, and/or a speaker series featuring local business owners, artists and fashion designers. There might be food truck events with residents voting on which cuisines to feature and wine tastings. A volunteer component is also being explored, such as 5K runs or back-to-school drives for kids.

Neumann once enthralled investors with grand visions about co-living and coworking, even expanding with a school called WeGrow and apartments called WeLive. Neumann famously trademarked the word “We.”  But after a prospectus revealed WeWork's stunning losses, a planned 2019 IPO was withdrawn. WeWork was taken over by new executives and finally went public last October with a more down-to-earth $9B valuation. Neumann walked away with more than $1B and temporarily stayed out of the public eye.

In November, Neumann sat for an interview with The New York Times and mentioned he’d been making investments through his family office, called 166 2nd Financial Services. Now, as reported by the WSJ, Neumann intends to create a widely recognizable apartment brand that’s heavy on amenities.

Peterson didn't have details on Neumann's larger plans for expansion or potential rebranding, though he "would not be surprised if they acquired additional trophy assets in South Florida."

For now, the focus is on the two announced Miami properties.

“We don't want to run this as an apartment complex," he said. "We want to run it as a community, and really kind of take that to heart and focus on engagement and connection with the residents ... We're looking to go beyond and provide unexpected daily pleasures to our residents, to make their life easier and make them feel part of the community."

Peterson said his firm had been recommended to Neumann’s team when they were scouting properties to buy. He walked the properties with Neumann and his team before giving a presentation on how Altman firm would manage them.

“I hate to be corny, but sometimes you kind of click and you kind of find a kindred spirit," Peterson said. "We look at the world the same way. We want to be a little bit different and provide a little bit more – in this case, a lot more — than run-of-the-mill, standard services.”

Peterson declined to say how much Altman charges for property management services, as “different owners have different budgets and different styles.” A rule of thumb would be to have one person on-site per 100 apartments for “inside” duties like liaising with residents and another available for “outside” duties, i.e., building maintenance. At the Neumann properties, though, staffing ratios will be higher, with concierge-type services.

Peterson described Caoba and Yard 8 as “world-class properties.” Caoba includes touches like quartz countertops and floor-to-ceiling windows, while Yard 8 has a more industrial design, with open-concept spaces and concrete loft-style ceilings.

Online reviews from tenants include dozens of 5-star ratings and admiration for the luxury facilities, but also some complaints about partying neighbors and long waits for elevators. News reports have described car theft at Yard 8 and a shooting at Caoba. Peterson said crime and crowding are, unfortunately, “frustrations of urban living,” but the firm would do everything in its control to offer a superior living experience. A short-term rental program at Caoba is being phased out, Peterson said.

Neumann’s other real estate purchases reportedly include mansions in the Miami area, multifamily properties in Nashville and Atlanta, and the 34-story, 639-unit Society Las Olas in Fort Lauderdale, which was promoted as the largest co-living space in the country when it opened in 2020.

As for rent growth, Peterson said there wouldn’t be huge, immediate hikes, but market forces would dictate pricing, and well-run properties can command higher rents. Miami rates have risen 44.4% in just a year, per Realtor.com. 

“The idea is to provide more services, a better place to live, and at the end of the day, get paid a premium for doing that, and produce a return for ownership,” Peterson said. “The rental market in South Florida is increasing as rapidly as I've seen in my career.”

Future of Living President Christopher Hill — formerly WeWork's chief operating officer and Japan CEO — declined to comment. 

CORRECTION, JAN. 7, 5:30 P.M. ET: A previous version of this story misstated the month that WeWork went public and the dollar amounts that Neumann earned from WeWork and invested in Alfred. The story has been updated.