Asset-heavy operators own the buildings they operate. This captures full economic value (rent + ancillary revenue + property appreciation + exit cap rate compression) but requires substantial capital per bed. A 100-bed asset-heavy property in London costs €15–€30M; the same operating capacity asset-light costs the operator €1–€3M in capex and a master lease commitment.
Most institutional coliving capital prefers asset-heavy — it aligns more naturally with real estate funds' return architecture. Most operator equity capital prefers asset-light — it scales faster and creates higher revenue multiples on lower capital. The two camps coexist; many operators run hybrid portfolios.
In the field
The Collective was historically asset-heavy (Old Oak, Canary Wharf are owned). Mason & Fifth purpose-built asset-heavy. Greystar, Round Hill, Ivanhoé Cambridge invest in asset-heavy coliving via separate operating partners (typically Habyt or Common as the operator).
Common pitfalls
- ×Underestimating the working capital required to operate an asset-heavy portfolio — easily 6–9 months of operating cost in addition to capex.
- ×Capital constraints causing slow rollout — asset-heavy growth typically 1/5 the speed of asset-light at the same operator capacity.
- ×Interest rate exposure — leveraged asset-heavy is vulnerable to rate-driven cap rate expansion.
- ×Mixing asset-light and asset-heavy unit economics in operator KPI reporting — masks underlying profitability differences.