Bay Area-based Starcity has acquired co-living company Ollie, gaining key members of its team and its technology, along with the firm’s assets and management contracts, Commercial Observer has learned.
The acquisition will grow Starcity’s portfolio to 1,500 units, with 3,000 units in development and more in negotiation, according to information from Starcity. The portfolio is located primarily in the United States, though Starcity has one location in Barcelona and plans to expand further into Europe.
Ollie and Starcity both develop and operate co-living assets, though they’ve been focused on different markets. “They’re very aligned in how they built communities and how we’re doing it,” Starcity Founder and CEO Jon Dishotsky said of Ollie. “We’re very strong on the West Coast, we’re growing in Europe, but don’t have anything on the East Coast.”
Starcity raised a $30 million series B round in April from investors Peak State Ventures, Reshape and Y Combinator, for a total of $50 million raised since it was founded in 2016. Financial terms for the Ollie acquisition were not immediately available.
Ollie launched back in 2013 with a micro-unit development in Manhattan’s Kips Bay, and has since expanded to Los Angeles, Pittsburgh and Boston. In New York, Ollie partnered with Simon Baron Development and managed an apartment block in the Alta tower in Long Island City.
Ollie was relatively early to the co-living trend and helped the asset class mature, Dishotsky said. “They were a pioneer in many cases to onboarding institutional capital partners to their way of developing assets.”
Dishotsky founded Starcity in 2016, and has since developed several assets in the Bay Area, with several more under development, including a 270-unit development at 475 Minna Street in San Francisco and a massive 800-unit project in San Jose, which has faced some delays due to the pandemic as well as other issues.
While the pandemic has made many question the viability of co-living, Dishotsky says demand is back to pre-COVID levels after a sharp dip in the second quarter.
The value of co-living should be that it’s priced at a discount to new construction studios, and offers a better experience than a traditional rental from a mom-and-pop landlord, Dishotsky said, thus offering great returns and more affordable housing simultaneously. “That’s what co-living should do,” he said. “It shouldn’t just be this lifestyle layer.”
The acquisition will also give Starcity access to Ollie’s technology, such as its roommate matching program and amenities platform. “They have tech that matched our roadmap,” Dishotsky said, “but we focused on other things first.” In addition, key members of Ollie’s leadership will join Starcity, including President Gregg Christiansen, who replaced the original Ollie founders, brothers Andrew and Chris Bledsoe, in 2017.