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.
Step-by-step
- 1
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.
- 2
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.
- 5
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.
- 7
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
Open the tool →