AUSTIN – (Realty News Report) – Short-term rentals (think Airbnb or WhyHotel) have become a major conversation in the multifamily industry.
Integrating the short-term rental (STR) model into an apartment community is complex, but it can make economic sense—especially during a new urban project’s lease-up phase.
“There’s certainly a feeling of things warming up,” says Omer Rabin, Managing Director, Americas, of property management platform Guesty. “The relative softening in some U.S. rental markets is prompting many owners to experiment with STRs. On average, an owner will see about 30% higher revenue per unit by renting on a short-term basis, which is significant.”
There are, however, trade-offs and risks. Will residents who sign year-long leases welcome transient, hotel-like guests arriving and departing at all hours?
Will large real estate investment trusts (REITs) embrace this niche fully?
Maybe—maybe not, says Sue Ansel, CEO of Gables Residential, a major multifamily operator.
“We’re still trying to determine how renters will respond,” Ansel said during her on-stage remarks at Hanley Wood’s HIVE conference in Austin last week.
One real-world example: Houston-based Camden Property Trust reached an agreement with WhyHotel to run a temporary “pop-up hotel” inside Camden’s new 21-story, 271-unit tower at 1515 Austin in downtown Houston. WhyHotel will operate 100 apartment units as public hotel rooms during the building’s initial lease-up, through the end of 2020. Guests can book stays ranging from a single night up to three months.
At the HIVE conference in Austin, Ansel was interviewed on stage by Diana Olick of CNBC.
Dec. 12, 2019 Realty News Report Copyright 2019
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