Tech Billionaires Keep Thinking Apartments Are a Software Problem Travis Kalanick and the Habitas founder just launched Sekra with $12.5M. Smart lights, circadian rhythm tech, sleep consultants, community ambassadors. WeWork tried this in 2016 with WeLive. Projected $606M in revenue by 2018. Built two locations. Shut down in 2021. The pattern: tech founders see manual property management and think "automation arbitrage." They miss what actually matters: location, execution, and unit economics that work. Why does this keep happening? Traditional Class A multifamily runs 38-50% operating expenses depending on market, age, and utility structure. Add community programming, hospitality staffing, tech support, and higher turnover? You're pushing 52-60% opex based on the operational complexity these models require. To maintain similar NOI margins with materially higher expenses, you need much higher gross rents. But you're marketing to cost-conscious renters who can't afford standard studios. The math doesn't work. Common raised $130M. Managed 5,200 units. Bankrupt in 2024. Campus shut down despite residents loving it. CEO admitted they couldn't make the economics work. HubHaus raised $13.4M, then collapsed. Most used master leases. They leased entire buildings from landlords, subleased to residents. When occupancy dropped, they still owed the master lease. All downside of ownership, zero equity cushion. They went bankrupt and handed keys back. The tech ages out before you exit. Smart locks and IoT systems have 3-5 year useful lives. Your hold period is 7-10 years. By exit, half your tech is unsupported. Either you eat unbudgeted replacement capex or you're marketing obsolete features. Hospitality doesn't translate. Habitas works because guests pay $400/night for 3-7 days in Tulum. They leave before novelty wears off. Apartments mean the same people for 12 months. By month three, the curated community feels like an HOA you can't escape. Renters optimize for proximity to work, then price, then unit quality. Tech features might crack the top ten. Software solves process problems in real estate. Leasing automation, smart thermostats that cut utility costs, access control that reduces staffing. Those get adopted because they improve NOI. Lifestyle branding and community platforms that increase operating costs? Operators won't pay for what tenants don't value enough to justify the expense. Tech wins when NOI improves. Everything else is overhead. https://lnkd.in/eCTU46u2