Tom Woodard, Director
GRS | Corteq
(561) 325-9857
[email protected]
Commercial real estate’s hospitality sector is already familiar with room-sharing service Airbnb. After all, the company is valued around $31 billion, more than most large hotel chains, including Hilton Worldwide.
It seems to be taking a less threatening tactic with the multifamily sector, though. Airbnb is teaming up with Newgard Development Group to build a 324-unit apartment building outside of Disney World, in Kissimmee, Fla.
To open next year, Miami-based Newgard will build the facility, called Niido. Tenants of the building will be able to rent rooms for up to 180 days, with 25 percent of the revenue going back to the developer. Newgard’s chief executive officer reportedly says that the partnership is looking for more sites across the Southeast, including Charleston, S.C.; Nashville; and cities in Texas. For its part, Newgard builds high-end assets, primarily around the Miami area.
This move follows Airbnb’s Friendly Buildings Program, which attempts to work with multifamily landlords in the home-sharing space. The National Multifamily Housing Council says it supports the effort, as long as apartment-building owners are willing to participate in such a program. The Friendly Buildings Program touts increased transparency in home sharing, giving landlords more control over the process of a tenant renting out a room.
A recent NMHC survey found that 43 percent of their tenants are listing their apartments on such sites as Airbnb. About 33 percent said they would be interested in a partnership like Family Buildings, while 42 percent aren’t. The other one fourth were undecided. Heading up the list of concerns were safety, insurance and liability and quality of life issues. There are also local laws and restrictions on short-term renting that need to be taken into consideration.
For a large multifamily owner, it’s bound to be very difficult to track the actions of all tenants in detail. Even if there are rules against such activity, enforcement must be difficult. That being the case, the deal with Newgard seems like a step in the right direction for both tenants and landlords. We’ll see if it sticks, but if renters are assured to have permission to temporary lease their spaces, and asset owners are able to get a cut of the business, it could be a win-win for both parties.
About GRS Group
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.
Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance. We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.