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adam neumann's real estate startup flow has quietly opened its first branch in saudi arabia's capital, riyadh. it's the billionaire's latest move into the co-living and apartment rental market.

original title: "wework founder adam neumann brings his "aware community" real estate startup to saudi arabia"

he had previously made an attempt to enter the real estate market, but after he resigned as ceo of wework, the project called welive was also halted. afterwards, neumann spent another us$1 billion to acquire multiple apartment buildings in the sunbelt of the united states, and in 2022 raised us$350 million from andreessen horowitz (hereinafter referred to as a16z) to establish flow . afterwards, neumann equipped flow's properties with co-working spaces, yoga classes and hotel-style housekeeping services, trying to introduce the concept of "community" into the residential sector.

flow's project in riyadh, called flow narjis, began a "trial run" in august this year, renting out "aware communities" and two- and three-bedroom apartments in a compound in the an narjis area near riyadh airport. apartment. the furnished apartments, which start at $3,500 a month, illustrate flow's business model of bundling housing with services such as laundry and housekeeping, as well as amenities such as pools, gyms and bowling alleys.

in august, one of flow narjis’s first residents filmed a youtube video showing a partially completed, largely abandoned building.

the 238-apartment compound was built by saudi construction group safa, but it appears from the video that flow has renovated the building to cater to international tastes, removing the walls that traditionally separated the men's and women's areas of the gym to allow its style leans more toward wework’s bohemian aesthetic. "flow is designed for everyone. the design changes to the building were made to align the building with our brand," flow spokesperson amy stevens said in a statement to forbes .

flow has three properties in the saudi capital with nearly 1,000 apartments, which are expected to be completed by the end of this year. neumann's startup partnered with local private investors to buy the properties, stevens said. she said the saudi sovereign wealth fund that backs a16z has not yet invested in flow.

in august 2022, after wework's valuation plummeted from its peak of $47 billion, a16z still decided to invest in neumann's flow project, which puzzled many people. earlier this year, neumann attempted to make a bid to buy back wework after its stock price plummeted and the company filed for bankruptcy protection. but his proposal for flow to acquire wework for $650 million was rejected. instead, real estate software group yardi acquired the bankrupt startup for just $450 million after striking a deal with wework's lenders.

when neumann first announced flow, its business model was a mystery.flow’s job posting touts an “ambitious vision for the future of life,” and during neumann’s presentation it appeared to include a bevy of other ideas, from cryptocurrency-backed financial services to letting tenants build with their rent vague plans for equity, to name a few. additionally, he floated the idea of ​​renters unclogging their own toilets to establish "ownership."

“if you live in your apartment, you own the apartment, and if your toilet is clogged, you’re going to pick up the toilet bowl and unclog it. that’s the difference between owning something and renting it. you go from being a temporary resident to being part of the community.”

in october 2023, neumann said at an event in saudi arabia: "we looked at residential buildings and thought, what if we use technology to make this system work better and attract people who are good at housekeeping... …and run an apartment building with the label of a four seasons hotel, what will happen?” but it is worth noting that branded apartments and luxury serviced apartments are not a new concept; four seasons’ extended-stay apartments have been around for twenty years. for many years.

in april this year, the startup opened its first flow-branded apartment buildings in fort lauderdale and miami, florida, mainly providing mid- to long-term apartment rental services, but its promotional selling points have become more low-key and covered in eco-friendly outerwear. flow's new website touts its values ​​as "commitment," "growth," "love" and "unity."

the startup also has an app that provides concierge-style services,for example, opening the door for a visitor or making a maintenance request to the building manager. according to the flow website, both florida locations are offering tenants a month of free rent as an incentive, a common promotion used to entice tenants to sign expensive apartment leases.

neumann appears to be exporting similar concepts to saudi arabia, serving as the keynote speaker at the sovereign wealth fund's annual davos in the desert summit last year.

flow narjis hosted a "cacao ceremony" (a chocolate-themed ritual modeled after the mayans) last week, as well as dance and yoga classes and offered "oh my god, i'm alive" bags. tote bag. "get ready to dive into art classes, strike up yoga poses, or discover the hidden treasures of our beloved city with your new friends," flow liard posted on her instagram account in august.

in fact, neumann, the wework co-founder, has a tangled history with saudi arabia and its sovereign wealth fund.while saudi arabia has become a major backer of technology startups and investors over the past decade, its sovereign wealth fund remains mired in controversy following the murder of journalist jamal khashoggi.

softbank injected more than $20 billion in equity and debt into neumann's wework, with much of the money coming from the middle east kingdom's sovereign wealth fund, which is one of the main backers of softbank's vision fund. the vision fund is the world's largest venture capital fund. according to reports, softbank increased its investment in wework despite its huge losses, leading the saudi public investment fund to boycott the investment in the second vision fund (wework did not respond to a request for comment at the time).

still, neumann emerged as a star speaker at last year's "davos in the desert" summit in riyadh, hosting a "shark tank"-style startup competition.neumann also hinted last year that he planned to expand flow to saudi arabia. at a march 2023 conversation with his backers marc andreessen and ben horowitz, neumann said: "saudi arabia is almost like a startup." horowitz said of saudi crown prince mohammed bin salman: “this country has a founder, but people don’t usually call him the founder, they call him his highness. "

flow isn't neumann's first foray into residential real estate. the israeli-born, kibbutz-raised founder launched wework's shared-housing arm, welive, in 2016 with a similar pitch to flow: welive would provide young people with fully furnished apartments and studios for short-term use. lease. the new york times reported at the time that wework expected to have 34,000 welive tenants by 2018, accounting for a quarter of the startup's revenue, but the project had two locations in new york and virginia after neumann stepped down as chief executive. the executive closed shortly after the company's ipo plans failed in 2019.

neumann was ousted from wework over objections from the board of directors and investors, and the billionaire has since bought stakes in more than 4,000 apartments in florida, georgia and tennessee worth more than $1 billion.according to the wall street journal, the deals were funded by hundreds of millions of dollars neumann received from selling wework stock and a $200 million consulting fee from softbank group. but flow spokesman stevens told forbes that the news was untrue.

in addition, the billionaire invested in property management startup alfred and later acquired rival real estate startup carson and integrated its technology into flow, which is also involved in the property management business. when forbes reported the move, neumann denied that flow competed with alfred, but later reduced his stake in the new york-based startup. "they are not and were not competitors," stevens said.