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On Wednesday September 12, 2019 ULI Philadelphia invited a variety of Multifamily trend setters to speak on a panel to discuss Quasi Hotels, Co-living and Furnished housing. The event began with Leo Addimando of Alterra Property Group introducing the event and asking lenders in the room to consider financing options for these new trends.
He then passed it off to Brad Korman of Korman Communities/AKA to moderate the panels. The first panel consisted of Quasi-Hotel Experts including Jason Fudin of WhyHotel, Branigan Mulcahy of The Guild and Shawn Tuli of Herrsha Hospitality Management (HHM). Brad began the panel with an anecdote about how the concept of home is changing and we must learn to adapt. Most of the Quasi Hotels like The Guild and WhyHotel master lease or set up management contracts in luxury multifamily buildings. Most of their demographic is 20-30 year olds that stay for an average of 2-3 nights. These are both individual business travelers and large groups traveling for conventions. Shawn commented that HHM typically pulls from a different base of travelers that stay for more nights. While all parties indicated interest in Philadelphia, Jason noted unique local challenges including the location of luxury multifamily assets is not necessarily the same as where there is a need for hospitality. Another hurdle they are attempting to overcome nation-wide is the pace of zoning processes and approvals.
The second panel consisted of Co-living companies including Andy Levin of Ollie, Lauren Lynch of Bungalow, and Caesar Nguyen of Common. They began with the explanation behind the need for a co-living product. Job growth has expanded in cities so rapidly in recent years that more people are moving to urban areas where affordability can be a challenge. Co-living provides tenants with an option that offers luxury amenities and services at a more accessible price point. Investors are starting to understand this idea and come around to partaking in the movement. Common received their first Fannie loan this year and continue to work with Fannie and Freddie to find financing options for these projects. All three companies agreed that their rent roll looks no different than traditional multifamily because most of their leases are a minimum of 12 months. Part of their success is due to powerful roommate matching technology and the option to move units should something not work. They take care of everything from utilities to internet to housekeeping as to remove as many pain points as possible between roommates.
The final panel focused on Furnished Housing. The panelists included Andrew Levin of Sonder, David Shapiro of Lyric and Amy Violette of Stay Alfred. These panelists have more similar concepts to the first set of speakers. They all focus on short term travelers with an average stay of 3-4 nights. Their model differs slightly in that they typically master lease entire floors or whole buildings for 3-10 years. These are fully furnished apartments that are managed by contractors rather than in house staff. Panelists noted that currently, Philadelphia has favorable legislation to allow for this operational model.
Thank you to all the panelists who shared their national insight on this topic. Thank you also to all of our sponsors that made the event possible, including Title Sponsors: Ballard Spahr, Capital One Commercial Banking, and Land Services USA, as well as Supporting Sponsors: JKRP and Toll Brothers.