I lived in the city for over 15 years, and in that time I had 12 apartments. In hindsight that is insane, and a tremendous waste of time and money and any adult in my orbit at that time made sure to tell me so. But, in the moment it made perfect sense. Every year I learned a little more about who I was, what neighborhood suited me, what I valued, and I would find a place that reflected that. In your 20s and 30s you are constantly changing, so where I lived changed with me.

The one part of my life that didn’t change that way though was my friendships, specifically my female ones. The ones I had then, I still have today. And yet I never once made a friend in a building where I lived. It always felt almost taboo to even talk to a neighbor even though you quite literally shared a wall with them. I would say maybe it’s a NYC thing, but I experienced the same in other cities I lived in before and after.

Turns out, that it was not so farfetched to feel the way I did. A renter who doesn’t know anyone in their building intends to renew just 29% of the time. A renter with seven or more friends in the building renews 47% of the time.

Same apartment. Same rent. Same appliances (in hindsight I can not believe how many apartments I lived in without a dishwasher). The only thing that changed is whether they have friends or even acquaintances that also live there.

This data is from a study by Witten Advisors, published by Apartment Life, across more than 30 communities and it shows a consistent pattern in residential. 1-3 friends gets you to 38% renewal. 4-6 gets you to 40%. Each single connection makes a resident about 8% more likely to stay.

Neighbors are the real amenities.

We so casually pay the premium on things we think we need like a gym in the building, a rentable party room or outdoor space, but those are, more or less, a given now. The amenity that actually predicts renewal is whether the person in unit 4B knows the person in 4C and it’s the one thing most buildings leave completely to chance.

Many of my meetings these days are with landlords. Residential owners, property managers, the real estate companies deciding the fate of many underutilized buildings in and around New York City, and in many ways retention has become the most important topic of conversation. Office vacancy is still sitting near record highs. On the residential side, renewals are running at historic levels, because in a softening market keeping the tenant you have significantly beats chasing a new one.

The same story is playing out on the office side. CBRE analyzed 4,350 leases across twelve markets. Class A and A+ rents rose 5.2% since 2023 while Class B and C fell.

But the thing that’s actually moving the needle is more specific than “nice building.” Lifestyle Markets, as JLL calls them, are mixed-use districts built around walkability, gathering, and experience. The offices in those markets command a 32% rent premium over standard Class A. They pre-lease higher, hit 90% leased twice as fast, and stabilize at higher occupancy. JLL expects this kind of space to grow from 4% of the office market today to roughly a third by 2040. Hines is one of the developers named as leading the shift, and their partnership with Fabrik as a social wellness amenity doubles down on that.

The tenants are paying for the same thing the renter with seven friends has. A reason to be there that isn’t a desk.

Post-Covid, when companies mandated a return to the office after months or years from working at home, the offices stayed empty. Gensler found that around 75% of employees would come in more often if the experience were worth the commute. Presence can’t be mandated. It has to be worth showing up for.

And, disconnection at work stays expensive long after the lease is signed.

Workplace loneliness costs U.S. employers about $154 billion a year in stress-related absenteeism. Lonely employees miss five or more extra days a year. Gallup found that only 2 in 10 workers have a best friend at work, and companies that move that number see 10% higher profit and 28% fewer safety incidents.

The employer leasing those floors is losing money to disconnection whether or not anyone is saying it, and I believe that the buildings that help solve it become very hard to leave.

In 2023 the U.S. Surgeon General declared loneliness a public health epidemic, as harmful as smoking fifteen cigarettes a day, making the demand for connection a documented crisis with a documented price.

Most landlords already know that community matters. They program events, hire a resident experience manager, put “community” in the leasing materials. They are using the buzzwords to attract the right crowd. But it’s unstructured, unmeasured, and left to whoever on the team has time. You can’t underwrite what you can’t measure, so it stays a nice-to-have instead of the retention engine the data says it is.

I think that’s changing. Connection and belonging are the most durable retention strategy in real estate, and it’s finally becoming something you can build on purpose instead of leaving to chance.

The buildings and companies that figure this out first, and have a scalable way to deploy it and measure it, will have an edge that’s very hard to copy. One that costs far less than building a rooftop swimming pool.

Sources

• Office vacancy near record highs (18.6%, Q1 2026): CBRE, U.S. Office Market Report. cbre.com

• Renewals running at historic levels (~57% of leasing activity) amid a softening rental market: CoStar / Apartments.com and industry reporting, 2026.

• Friendship and lease renewal (29% to 47%, and the 1–3 / 4–6 / 7+ ladder): Witten Advisors, published by Apartment Life, “The Friendship Factor,” resident surveys across 30+ communities in GA, TX, AZ, and CO. apartmentlife.org

• Each friendship makes a resident ~8% more likely to renew: RealPage. realpage.com

• Flight to quality, Class A/A+ rents up 5.2% since 2023, prime vacancy ~5 points below non-prime: CBRE, “The Flight to Quality Quantified,” 4,350 lease comparables across 12 U.S. markets. cbre.com

• Lifestyle office 32% rent premium, faster lease-up, ~5% higher occupancy, 4% to one-third of inventory by 2040, Hines among leaders: JLL, “Lifestyle Office Markets 2025.” jll.com

• ~75% would attend the office more with their ideal experience mix (+0.9 days/week): Gensler Global Workplace Survey (2023), cited in JLL. gensler.com

• Workplace loneliness costs ~$154B/year in stress-related absenteeism; lonely employees miss 5+ extra days: Cigna Loneliness Index (Ipsos survey of ~6,000 U.S. employees, 2019), published in the Journal of Organizational Effectiveness: People and Performance. newsroom.cigna.com

• Only 2 in 10 employees have a best friend at work; closing the gap linked to 10% higher profit and 28% fewer safety incidents: Gallup. gallup.com

• Loneliness declared a public health epidemic, as harmful as smoking up to 15 cigarettes a day: U.S. Surgeon General’s Advisory, “Our Epidemic of Loneliness and Isolation” (May 2023). ncbi.nlm.nih.gov

Where does Fabrik fit? Does it fit inside an already existing category?

I have always said no because I don’t think we fit neatly anywhere, which in some rooms is challenging to navigate. People have called us coworking, PropTech, hospitality, community, and even the Creator Economy. None of those labels ever felt quite right. The more we build and the more I consider the question, the more I believe we're building infrastructure for something else entirely.

I just didn't have a name for it yet.

Every economic era is defined by what becomes scarce next.

Pine and Gilmore named the Experience Economy in Harvard Business Review in 1998. They illustrated it with a birthday cake.

A hundred years ago, mom made one from scratch. It cost pennies.

In the industrial economy, she bought Betty Crocker mix. A dollar or two.

In the service economy, she ordered one from the bakery. Fifteen or twenty dollars.

By the 1990s, parents were outsourcing entire birthday parties to Chuck E. Cheese. One hundred dollars or more.

Their argument was that economic value moves up a ladder. From commodities to goods to services to experiences. That framework held for almost thirty years and I think we're watching it happen again.

But I think there is a rung above the experience.

It is the supper club where strangers sit at a long table and leave knowing people they didn’t know when they arrived.

Nobody is paying for the food.

The food is simply the reason people showed up. What people are really hoping for is that something happens because they were there. A conversation. A friendship. A collaborator. A customer. An idea. The kinds of things you cannot predict or manufacture, only create the conditions for.

Welcome to the Presence Economy where the most valuable outcomes happen because people are in the same room.

If my last issue was about why AI cannot replicate human connection, this is the economic consequence of that. Economic value always moves toward whatever is scarce.

Today, information is not scarce. Content is not scarce. Software is not scarce. Even expertise is becoming less scarce.

Being physically present with other people is. Trust built over time is. Belonging is.

And I think that scarcity is going to hold for a long time.

When Gwen and I started building Fabrik in 2023, we didn't have language for any of this. What we did have was a conviction that there was a new class of entrepreneur hiding in plain sight. Community builders.

They are yoga instructors, chefs, artists, coaches, facilitators, organizers, musicians, educators, founders, neighbors and some of the most wonderful people you could ever meet. People whose work wasn't simply teaching or entertaining, but bringing people together.

Long before institutions started talking about social infrastructure or the relational economy, we saw people combating loneliness one gathering at a time and they weren’t looking for another social network or tech solution. They needed physical infrastructure, places to gather, and distribution.

And many needed a way to build sustainable businesses around bringing people together.

We didn't think we were building another event platform. We always knew we were building infrastructure for the people creating presence. Three years later, the institutional validation is starting to catch up.

The World Economic Forum published a paper in June arguing that trusted human networks are “strategic infrastructure, not soft assets.”

Sequoia, in their framework for AI’s next five years: “Only human relationships and human attention supply the reason any of it matters.”

Alex Imas, an economist at the University of Chicago, calls it the “relational sector”, the next frontier of economic value.

The consumer data is moving the same direction.

Vinyl outsold CDs in 2023 for the first time since 1987.

1.1 billion basic dumbphones were sold in 2024 with people actively buying less connectivity.

Once people could gather again after COVID, Zoom lost more than half its customers.

79% of consumers say online experiences lack the “magic” of in-person. That’s from a Harris Poll of 2,000 people

A writer named David Jay put it better than I have. He wrote this in 2021:

“We are not held back from a presence economy by a lack of demand. We are not held back because of a lack of interested resources. We are held back because we do not know how to move institutional capital to community organizers operating at human scale.”

I’ve spent the last three years building with community builders and organizers. Hundreds of them. People who are extraordinarily good at creating connection in-person at human scale.

I can’t name one with institutional capital behind them, and that gap is a market.

The people building it are already out there hosting gatherings, workshops, and supper clubs. They are creating places where strangers become communities, mostly on belief and passion, without institutional support.

Maybe this isn’t a new economy at all. Maybe it’s something that’s been there all along, and we’re only now recognizing its value.

Which means we’ve probably been asking the wrong question.

Not where Fabrik fits.

What happens when presence becomes one of the economy’s most valuable resources?

She was three weeks old and I was exhausted. Instead of texting my friends who would also be awake with their babies, the ones I used to send unhinged voice memos to about pacifiers and sleep schedules when my son was born just 3 years ago, I asked Claude.

“Should I try to give the pacifier so she transfers or wait until she wakes up looking for it?”

It gave me a great answer that was thoughtful, based on evidence and efficient in a way that I appreciated in the moment. It was exactly what an exhausted mom to a newborn might need in the middle of the night.

But I didn’t text my friends. That 2am thread was chaotic, entirely unproductive and often really funny to read back in the morning. But more importantly it was also a form of connection and a beacon of light that showed we were in this together. It turned a hard night into a shared one.

And in that moment a few weeks ago and many times since, I replaced it with AI and it really got me thinking.

I use AI a lot for research, sometimes as a thought partner for strategy and often for support in modeling and it is genuinely helpful.

But I’ve been watching what it replaces. The quick question you used to ask a team member. The check-in that didn’t accomplish anything except make someone feel less alone. Those moments were connection and they were so normal that we took them for granted.

Workday released a report recently called the Human Connection Workplace Index and the title alone is worth pausing on.1 A company that manages the work lives of millions of people isn’t publishing an Index about productivity or burnout. They’re publishing one about human connection, because connection has become a measurable business problem.

The same company is currently defending Mobley v. Workday, a class action lawsuit alleging its AI automatically screened out job applicants for discriminatory reasons. Rejections came in the middle of the night. No human ever saw those applications. Behind each one was a real person, and countless companies never got the chance to meet them.

I’m not mentioning this to discount the data in the Index because it is valuable and highlighting the exact problem the business of belonging is tasked to solve. But we can be leveraging the newest technologies in ways that are life-changing for efficiency and possibility while also creating significant deficits, connection and otherwise if we are not using them responsibly.

More than a third of employees now use AI for companionship at work. 43% say their biggest fear about AI is reduced human contact. Job loss ranked lower than not connecting with their peers.

Gen Z is 12 times more likely than Gen X to feel completely disconnected from colleagues. The most online generation in history is the loneliest at work. For many of them, AI already feels emotionally easier than people. Which means that in addition to feeling disconnected, they're missing the friction that builds communication skills, confidence, and real relationships over time.

So what broke?

There’s a paper in Science that gave me a term for what I’ve been watching.

The researchers called the office “an institutional engine that produces vital social contact as a cost-free by-product of economic activity.”2 And that’s a fancy way of saying that the office wasn’t designed with human connection or friendships in mind but it naturally happened in really meaningful, life-altering ways. It was a by-product of showing up and an inherent value to the perceived inconvenience. When we stopped showing up, we didn’t just lose the commute.

I am one of the millennials who will talk ad nauseam about how actually going to work changed my life in countless ways but the most meaningful is my adult friendships. I can’t imagine a day in my life without these women that I met through collaboration, long days and nights and, sometimes shared misery. We've spent far more time building on those years than we did at the jobs that started them.

1 in 14 remote workers now spends an entire workday with zero human contact. And they don’t make up for it after hours.3 We didn’t notice what that was doing for us until it was gone and honestly it keeps me up at night.

I see the opposite at Fabrik.

We have three social spaces in New York and Chicago. What strikes me is how different the energy is from almost everywhere else. People aren’t on their phones the way they are out in the world. We didn’t ask them to put their phones away. Something more interesting is happening in the room.

Our members and guests sometimes forget to take photos. I’ve put my phone down at Fabrik and not found it for hours, which can be problematic when I blow through an entire meeting (deepest apologies to those on the other side of my Zoom when that happens). When is the last time you did that? I can hardly believe it when it happens to me.

Here’s what I keep coming back to: AI will automate your job before it automates your friendships.

The things AI is extraordinary at: research, drafting, analysis, strategy - it is replacing those quickly. The things it cannot do: walk into a room, sit across from someone, make them feel seen, build a shared history. Those can’t be automated and not because many companies and people aren’t trying. Because they are the point of this life we are living.

That asymmetry is the business opportunity, because human connection has become a hot commodity.

The more we automate everything else, the more scarce and valuable real human connection becomes. The spaces, experiences, and communities that create it are going to matter more as everything around us gets optimized away.

AI can write the deck. It can answer the 2am question. But it can’t meet for coffee, or have that chance run-in or replace the chaotic, middle-of-the-night group thread that makes you feel so much less alone. It can’t make you feel the high of having just left a buzzing night with a room full of interesting people who you can’t wait to see again.

And what is it all for, if not for that?

I grew up in the hospitality industry, specifically restaurants, after being raised in a big Italian family where everything happened around a table. I’ve taken all of those learnings from over fifteen years of traditional service and applied them to building companies from zero.

Fabrik is the third.

What I kept finding, in both worlds, is that the most important variable, the thing that made restaurants work and companies stick, was whether people felt truly welcomed, like they belonged.

Over time, that feeling has become harder to find and easier to deprioritize. And now, in order to get it back, belonging is becoming a business. An actual economic category that we are calling “the Connection Economy.” And it’s one of the most important emerging markets of the next decade.

Over the last ten years, we made everything more efficient.

We worked from home so we didn’t waste time commuting. We ordered groceries or meal kits so we didn’t have to go to the store. We moved our social lives to screens so we could stay connected without going out.

And it worked. We got more efficient. But in doing that, we lost the small moments that used to create connection. The hallway conversation on the way to the bathroom or the barista you saw every morning on your way to work. The bartender at the bar downstairs who knew your name. The opportunity to have a serendipitous run-in with someone you haven’t seen in a while or maybe a stranger that you were meant to meet. In a lot of ways, we engineered the opportunity for magic out of our day-to-day lives.

And what is wild is we didn’t notice what those moments meant or were doing for us until they were gone.

I watched this happen in a very specific way.

Before we started Fabrik almost three years ago, I helped build Spacious, a network of drop-in workspaces inside empty restaurant dining rooms across New York City. The idea was simple - we took spaces that sat unused during the day and opened them for people who needed somewhere to work.

We were building for productivity, but in doing that, something else happened that we didn’t plan for.

People started meeting each other. They started building companies together. They became friends. They dated - some even got married! Because they were moving between locations across the city (a unique part of the Spacious model), there was serendipity in the idea of who you might run into every day.

Communities made Spacious their home. People who worked differently, who were building brand new ideas from their brains alone and looking for a room full of other people who saw the world the same way. They gravitated to these spaces.

We didn’t design for community but it was a by-product of what we built because we opened the doors to hospitable spaces and welcomed members in, to just be.

In 2019, the business was acquired. Shortly after, nearly all 50 locations closed. If you walk by the corner of 16th St. and Union Square now, seven years later, you will still see a giant yellow Spacious logo on the side of a building. If you look in the windows, you will see a moment totally frozen in time.

Just months after that, COVID hit and we were all quarantined in our houses and apartments.

The communities that had formed inside those spaces tried to survive without them and I hope that some did. What I know for sure is many came back smaller, some disappeared, some went virtual. All have a different feeling and most scattered.

It was a masterclass in what happens when you take away what’s holding community or relationships together. Proximity and Serendipity.

While this is true about Spacious, it is also true of an entire generation.

For most of human history, belonging was delivered by institutions that didn’t charge for it. Your neighborhood. Your church. Your office. These weren’t products. They were just where life happened naturally in close proximity to where you lived.

Today, most of them are gone or weakening. And as they do, people are losing the regular human contact that builds real relationships over time.

In 2023, the U.S. Surgeon General, Vivek Murthy, declared loneliness a public health epidemic. When the government names something a crisis, it means the systems that were supposed to prevent it have failed.

And then AI became mainstream and sped everything up.

For the record and to get this out of the way, I think AI is extraordinary. But it can’t create belonging. It can’t replicate the moment you find a room full of people who just get it. The need to connect is what makes us human, and AI won’t touch that.

Automate everything else and human connection becomes the rare thing. Rare things get more valuable over time. Capital is starting to notice.

Most buildings have physical infrastructure. Most companies now invest in their employees’ physical and mental health. But social infrastructure? Social health? Kasley Killam, a Harvard-trained social scientist and leading expert in social health, calls it the next trillion-dollar wellness industry. The systems that help people build actual relationships? Nobody owns it.

Connection is unstructured, unmeasured, and unmonetized. That gap is a market.

The Connection Economy is what’s forming to fill it. It’s not one type of business. It’s a whole category spanning industries that have never really talked to each other. Soho House figured out one version. Hines, one of the largest real estate companies in the world, just started embedding belonging into their portfolio as a line item. Chief figured out another. All three are signals that something structural is shifting.

When the institutions that used to deliver belonging for free start to fail, the market steps in.

I’m a mom to a three-year-old and a six-week-old. I’ve been building Fabrik since my son was four months old, alongside my cofounder Gwen Wiscount and an incredible team, because I want my kids to live in a world where people are connected and still meet in real life.

The Connection Economy doesn’t have a playbook yet. The category is still being defined. Nobody agrees on who the players are or what this looks like at scale.

We’ve been working to change that at Fabrik. Belonging Capital is where I’m documenting what we’re learning while we continue to build.

This is the business of human connection. What happens when belonging earns its place in the economy? I’ll be here finding out.

Jaclyn Pascocello is the co-founder and CEO of Fabrik, building belonging infrastructure for the places where people live, work and gather. She is a mom of two and lives in New Jersey. Belonging Capital is where she documents what she's learning while she builds.

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