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Why this former BMW exec is betting big on co-living

Living with strangers might not sound terribly appealing during a pandemic, but Esther Bahne has her eye on life after COVID-19. And it’s all about communal spaces.

Why this former BMW exec is betting big on co-living
[Photo: courtesy Quarters]
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When she was relaunching the Mini brand at BMW Group a few years ago, Esther Bahne found that her target market of young urbanites was not particularly interested in cars. This would seem to be a predicament for a global automobile conglomerate, especially one with its roots at the invention of the motorcar. But for Bahne, it opened an entirely new market.

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[Photo: courtesy Quarters]
“Owning a car had become less and less relevant to this group of people,” she says. “So we looked into what’s most relevant to these people, and number one in everybody’s category of needs was and still is housing.” So she shifted Mini’s brand from simply selling cars to associating itself with the urban lifestyles of the young and car-free or car-light, opening a café and co-working space in Brooklyn, launching a cities-focused accelerator called Urban-X, and, eventually, opening a Mini-branded short-term apartment building in Shanghai.

This unexpected pivot from cars to housing started Bahne down a path that has led to her new position as the co-CEO of Quarters, a co-living startup that offers short-term, turnkey, services- and amenities-rich, community-style urban housing. Seen as a no-hassle landing place for a nomadic class of young workers and entrepreneurs moving to new cities, Quarters offers co-living in the form of rooms and shared apartments inside buildings with community-focused common spaces. With flat rates and flexible monthly leases for as little as three months, Quarters offers something like a college dorm for adults, with living accommodations and social activities combined in the same building.

[Photo: courtesy Quarters]
Startups have been exploring the co-living market for the past few years, including U.S.-focused companies like Common and Ollie. A 2019 report on co-living from Cushman and Wakefield showed that co-living companies had secured more than $2 billion in global financing. Further investments were expected before the onset of the pandemic, which has already caused at least one co-living company to fold. But with the $300 million it raised in 2019, Quarters looks poised to persevere.

Founded in Germany in 2012, Quarters has grown into a larger-scale version of what Bahne started to do with the Mini brand, where she’d rise to become global head of strategy and innovation. For her Brooklyn project, a recently shuttered design-centric coworking community space and café called A/D/O, she curated a mix of social elements that turned the space into a kind of cultural hub for designers. “More and more I saw that as the perfect lobby of a building, where you would live above in a residence or an apartment but you would have access to all these amenities,” she says.

[Photo: courtesy Quarters]
Bahne is hoping to expand that community-centric approach to the 3,000 bedrooms in 800 apartments Quarters now operates in 15 U.S. and European cities, including New York; Washington, D.C.; Chicago; Berlin; and the Hague.

And though socially focused co-living may seem like a tough sell during a global pandemic, Bahne says the company is growing, with about 1,500 more bedrooms in the pipeline. The pandemic may even be part of its growth. “Quarters always addressed this somewhat elusive group of digital nomads,” she says. “Now we are all digital nomads. Everybody has to figure out how to work from home, or from anywhere. Figuring out how to build a home that works harder to meet these needs, I think, is fascinating.”

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One of the ways she’s planning to do so is to concentrate growth within the cities where Quarters already has a foothold. She says building up a larger local population enables the company to make more partnerships with local businesses and organizations, so that a building’s residents get, say, a deal on coffee at the café around the block or, in a post-pandemic world, access to exclusive openings or networking events. “If I have several hundred or a thousand people in one city, I can now make a really meaningful collaboration with the best places in town,” she says.

[Photo: courtesy Quarters]
For this housing-as-a-service approach, Bahne says her time working on Mini at BMW Group offered important lessons about tailoring what a company does to what its customers really want, even if it’s outside of the core business, be it cars or housing. As cities adapt to the lifestyle and work changes brought on by the pandemic, she says, housing will have to adapt as well.

“I think co-living is growing up, and that’s because it is expanding its own meaning. Co-living stood for flat share only, and it doesn’t have to,” she says. “It’s experience living, it’s living with services, and it’s a way of bringing people together. And that is so much more interesting to more people than before.”

With the funding Quarters has, its expansion plans may be realistic. And that may enable it to survive until a post-pandemic time when co-living and sharing social experiences with relative strangers feel like less of a risk.