Prerequisites
- ✓Operating coliving portfolio (3+ properties or 100+ beds)
- ✓Stabilized operations (12+ months at 88%+ occupancy)
- ✓Audited financials (last 2 years)
TL;DR
Institutional exit requires: stabilized operations, audited financials, clean cap table, transferable contracts, brand/IP transferable. Process: 6–12 months from prep to close. Valuation typically 8–15x EBITDA for asset-light operators, asset-heavy at cap-rate-implied real estate value + operator premium.
Why this matters
Coliving portfolio exits take three forms, each with different operator preparation requirements. (1) Asset sale to coliving-focused buyer — typically takes 6-9 months from listing, requires 18+ months of audited operating P&L and clean lease/management contracts; (2) Strategic acquisition by a larger operator or hotel group — takes 9-15 months, requires brand integration plan and key-talent retention package; (3) Recap with institutional partner — takes 6-12 months, structured as primary capital + partial founder liquidity, requires institutional-grade governance and reporting.
Exit valuation: typical EBITDA multiples for coliving operators range 8-14x at scale (1,500+ beds); per-bed valuations $25,000-$60,000 for stabilized single assets, with 1.4-1.7x multiple uplift for institutional-grade portfolios (200+ beds, audited financials, clean brand transferability). The Habyt-Common acquisition (2023) priced at ~$22,000/bed reflecting the distressed nature; healthy strategic deals price 2-3x higher.
Preparation work that materially shifts valuation: (1) Move from cash to accrual accounting 18+ months pre-exit; (2) Get 2 years of audited financials in hand; (3) Document all SOPs, brand assets, IP separately from PropCo; (4) Resolve all pending litigation and tenant disputes; (5) Renegotiate lease covenants to ensure assignability. Operators who skip these steps lose 20-40% of headline valuation in the diligence-and-negotiation phase.
Step-by-step
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1. Prepare the operating company
Last 2 years audited financials. Property-by-property P&L. KPI dashboard (RevPAB, occupancy, ALOS by property). Comparable trades research. Targets: €5M+ ARR, 88%+ stabilized occupancy, 25%+ NOI margins.
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2. Clean the contracts
Master leases assignable. Tenant leases standard (no over-customized terms). Contracts (insurance, software, vendor) transferable on change of control. This is where most operator exits stall.
- 3
3. Build the data room
Financial statements, lease terms, property documentation, tenant data (anonymized if needed), regulatory filings. 4–6 weeks to assemble. Use a deal-room provider (DealRoom, Datasite, Intralinks).
- 4
4. Engage advisors
Investment banker (lead). Tax counsel (jurisdiction-specific). Real estate counsel. Legal counsel for the deal mechanics. Costs: 2–5% of deal value all-in for institutional exits.
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5. Build the buyer list
Institutional buyers: Greystar, Round Hill, Patrizia, Ascott, ADIA. Strategic buyers: Habyt, Common, regional aggregators. List 15–25 targets; pursue 5–8 in serious DD.
- 6
6. Negotiate term sheets
Valuation, structure (full sale vs. partial), retention package, non-compete, earnout. Multiple bids drive better terms; sequential negotiations weaken your position.
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7. Close
Definitive agreements: SPA, asset purchase agreement, service agreements, retention agreements. 60–120 days from term sheet to close. Plan for tax close-out + transition support.
Common issues + fixes
×Buyer DD reveals KPI inconsistencies across properties
→Pre-DD audit: ensure RevPAB / occupancy / ALOS reported consistently across all properties for the last 24 months. Inconsistency is the #1 cause of late deal collapse.
×Founder-key-person risk concerns from buyer
→Document operations, train deputies, build org chart with redundancy. Buyer needs confidence that operations continue without founder. Most institutional acquisitions require 12–24 month founder transition.
×Master lease not assignable
→Re-negotiate with landlords. Some leases have change-of-control clauses; address in advance. This affects deal value substantially.
Frequently Asked Questions
What's a typical valuation multiple for a coliving operator?
Asset-light operators: 8–15x EBITDA. Asset-heavy: cap-rate-implied real estate value + operator premium (typically 10–25% over passive real estate). The exact multiple depends on growth, margin, and operator quality.
How long does an institutional exit take?
6–12 months from prep to close. 6 months is fast (clean operator, single buyer). 12 months is typical (auction process, full DD, multiple bidders).
What ARR threshold makes a coliving operator institutionally interesting?
€3M+ ARR for boutique acquisition. €10M+ for full institutional auction. Below €3M, exit is typically to strategic buyer (another operator) at lower multiples.
Institutional-Sale Readiness Audit
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