Adam Neumann's "Flow" $2.5 Billion Valuation Is VC Math. Real Estate Math Says $15 Million.

May 07, 2025 • 10 min read

Credit to Paul Stanton, who broke it down clearly. We ran the numbers too. Adam Neumann’s new venture, Flow, recently raised $100 million at a $2.5 billion valuation. It’s branded as a tech-enabled residential platform promising to “reimagine” how we live. Investors—including Andreessen Horowitz—seem sold on the narrative.

However, when you value Flow like any other real estate business—based on rent roll and cap rates—the numbers look radically different. Flow's Real Estate Holdings: Flow currently owns or operates around 500 rental units across a handful of properties in Miami, Fort Lauderdale, and a few land sites. It’s not a national platform. It’s not even midsize. Let’s assume these 500 units rent for $3,500/month—a fair average for Class A multifamily in those markets.

2 stabilized multifamily properties (Miami + Fort Lauderdale)
1 condo development (Downtown Miami)
2 land sites
Total estimated rental units: ~500

The Rent Roll:

Average Class A rent: $3,500/month
500 units × $3,500 = $1.75 million/month
Annualized rent roll = $21 million

Revenue Capture:

Flow doesn’t own all the real estate outright. Its revenue comes from:

Property management fees: 3–5%
Tech/services: 1–2%
Branded premium: 5–10% (optimistically)

Assume an aggressive 7% total fee capture (top of market):

$21 million × 7% = $1.47 million in annual revenue

The Cap Rate Math:

Valuations for management companies and OpCos typically trade at:

2–5× revenue (standard)
Up to 10× for premium, tech-enabled operators

The Valuation

Even at 10× cap:

$1.47 million × 10 = $14.7 million

That’s Flow’s real estate valuation today. Not 100x revenue. Not 1,000x. And certainly not 1,666x, which is what a $2.5B valuation implies.

This isn’t a knock on the ambition. Obviously a large part of the venture valuation Flow is derived on speculative opportunity, and the value created with its deployed capital. WeWork once presented as a tech company despite most of its assets being comprised real estate properties, but they were never able to make up for the vast disparity between it's venture valuation and it's real estate derived reality.