Corporate Housing Expansion
Recent trends in corporate housing have taken this industry by storm, and this niche within the national rental market is surging in popularity and demand. Several factors are driving this demand. First, employees on the out-of-town business topped the list of reasons. Secondly, it was a desire to explore different cities and neighborhoods without having to sign a traditional lease or stay in a commercialized area where many hotels are found. Lastly, there has been a shift away from other short-term rental platforms that have been riddled with problems from hidden cameras and rowdy guests who exceed occupancy limits and leave properties with costly repairs.
Corporate housing refers to fully furnished and fully serviced temporary housing units available for short-lease terms, not rentals – there is a difference. This unique niche is now considered a viable option for many would-be renters, including millennials and Generation Z looking to hold off on buying a home. Seasonal travelers, families, and business professionals relocating to a new city for a promotion or new job are also causing excitement within the industry.
In four years, corporate housing experienced a surge resulting in a 12% combined annual growth rate from $64 billion to $101 billion. In comparison, hotels reported a 3% annual growth during the same timeframe. With significant growth like this, many homeowners and renters are looking at this market differently, which has resulted in building a healthy, competitive market. However, in today’s climate, owners are wise to take a more in-depth look at the trend not only to reap success but enhance its value for major employers and the community at large.
These trends are on full display in the West Coast’s most renowned city, Los Angeles, California.
SoBeNY, a New York-based corporate housing accommodation provider, is moving forward with previously planned expansion plans that were temporarily placed on hold due to the current coronavirus pandemic. The company currently has about 600 units in its inventory and planned to add well over 1,000 more in the next 12 to 18 months, according to Brian Ferdinand, managing partner, SoBeNY, and its parent company CorpHousing Group. SoBeNY is the consumer-facing marketing and distribution brand of CorpHousing Group, a real estate business that acquires and holds the master leases for SoBeNY’s units.
Ferdinand commented that the company is planning a major launch of 100 new units in Los Angeles slated for August 2020. And Ferdinand isn’t stopping there. More units are in the works for further CorpHousing expansion, including Washington, D.C., and San Francisco.
SoBeNY is unique within a niche space and differs from many of its competitors in the apartment-style accommodation space. The most significant selling point of SoBeNY to not only its clientele but the owners of homes in areas SoBeNY operates is their practice of running criminal background checks and extensive screenings on guests, even for short-term stays. This practice addresses one of the main issues within the short-term rental industry, security. Short-term rentals have been under scrutiny due to occupants defying occupancy restrictions, disturbing the peace within residential neighborhoods, and causing damage to property interiors and exteriors.