Corporate Housing Providers Set Sights On Houston As Population Booms

Options for booking corporate housing have historically been limited and niche, staying hidden from the general public. 

Now, several Texas-based corporate housing companies are trying to change that.

Hoping to capitalize on the city's fast-paced jobs and population growth — and the departure of established corporate housing names like Sonder — operators like Lodgeur Inc. and Texas Corporate Homes are moving in to vacuum up their share of the niche furnished rental market primarily aimed at business travelers, corporations and insurance placements. 

“There’s a long, long history of extended stay [in Houston] because you have oil workers who are there temporarily,” said Bram Gallagher, director of economics and forecasting for AirDNA.

“There are quite a few hurricanes that hit the Gulf, and then you have people who are displaced and need places to stay. There’s travel nurses … It’s an industrial town. It’s got oil, gas. It has a big port as well. So all of those things are pretty amenable to that market.”

Houston’s short-term rental market has grown substantially in recent years, from 10,540 available listings in January 2019 to 17,319 in September 2024, according to AirDNA, which analyzes data exclusively from Airbnb and Vrbo, including vacation rentals in the mix. The percentage of listings in Houston that voluntarily require a 28-day-or-longer stay is 5.7%, AirDNA data shows.

Further statistics on corporate housing are harder to come by. AirDNA and CoStar both confirmed that they don’t track corporate housing stock because it is difficult to distinguish from other short-term rental listings. Even industry group Corporate Housing Providers Association was unable to provide market-specific data.

But it’s hard to ignore Houston’s robust jobs and population growth and a gap in the market.

More than 92,000 people migrated to Houston from June 2022 to July 2023, according to U.S. Census Bureau data, and the city is fast overtaking Chicago as the nation’s third-largest city. The Houston region also gained 626,200 jobs between May 2020 and September 2024, recovering 174% of pandemic-related job losses, according to a Greater Houston Partnership analysis.

Houston also has a low bar for entry to the market, with few strict rules on who can set up a short-term rental, Bram Gallagher said. And with one of the most prominent corporate apartment providers, Sonder, appearing to exit the local market and shuttering 80 locations, a new roster of contenders is entering the fray.

Sébastien Long, originally from Britain, saw an opportunity for corporate housing in Houston. Long is the founder and CEO of Lodgeur Inc., which furnishes, markets and manages vacant Class-A apartment units on a revenue-sharing basis with the property owner.

Lodgeur markets itself to “traveling professionals and digital nomads.” About 75% of its renters come into town for professional reasons, including internships and conferences, Long said. 

Long was familiar with furnished apartments given they are the norm in London. And, as a veteran of Sonder, founding Lodgeur wasn't a massive leap, though Houston can be a tough market for furnished apartment rentals, he said. Average daily rents are lower than other markets, though the cost to set up a property is about the same everywhere, making efficiency important.

“[Sonder] raised a lot of money, and it was all about growth,” Long said. “When things are like that, you can take your eye off operational metrics. I was not as good as them at raising money. It was mostly our money that went into [this] business and therefore, we've been a lot more careful with how we spend that money.” 

After a rocky start due to the onset of the pandemic, Lodgeur found that the company could build in efficiency by partnering with multifamily communities to furnish and operate vacant units on a short-term rental basis. 

“We shifted to a management model, revenue-sharing model, with our partners,” Long said. “And what we found is that instead of being a tenant, you become their partner. There’s far more collaboration.” 

Lodgeur has pitched to take over assets in buildings Sonder was vacating with an eye to finding more efficient ways to run them, he said. Long reads rental reviews to make sure any previous problems are fixable.

It is also working to make “corporate housing” more accessible to the general public, he said. While many people can benefit from corporate housing-type rentals, such as those visiting Houston for its best-in-the-country cancer treatment, they don't always know how to look for it.

“People are starting their searches online. They’re typing things in, a combination of MD Anderson, maybe they go to Airbnb and other places. That behavior isn’t established,” Long said. “Whereas in Europe, corporate housing is called serviced apartments, which is already a more public friendly name.” 

Lodgeur still lists its units on multiple platforms including Airbnb, but about 70% of its bookings come directly from its website, he said.

“They're getting leads every day coming in,” he said. “So the demand was there. They just never really realized it.” 

Texas Corporate Homes, which offers directly managed, professionally furnished single-family residences, is also seeing healthy demand, announcing this month that it is expanding into Houston and Austin.

The company partners online with single-family rental investors to lease properties to professional clients and people displaced due to natural disasters and other insurance-funded repairs, said Sean Gallagher, who leads business development for the company. 

Historically, when a company or insurance agent needed a single-family home for temporary use, agents would contact owners of homes listed for lease or sale to ask if they could implement a short lease, then they’d buy the furniture needed, Sean Gallagher said. 

“Obviously this has some friction and is not ideal,” he said. 

That's why Texas Corporate Homes began converting and furnishing single-family rental homes specifically for short-term rentals, with Sean and his brother Mark Gallagher drawing on their backgrounds in property technology to launch the business. 

After a multiyear track record of booking clients in Dallas through the company’s website, Houston felt like a natural fit, Sean Gallagher said.

“We have the technology, we have the systems, we have the people to be able to scale that across not just a local market, but across a broader geography,” he said.

Amy Lucio, who leads owner operations for the company and has 27 years of corporate housing experience, said Houston's growing number of rooftops and high population motivated the expansion.

“It has always been a very strong corporate housing market, all the way back to ’97 when I first started … It’s definitely proven,” she said. 

The company plans to pitch its model to single-family investors who may not have heard of corporate housing but are eager to hand over responsibilities to a company that promises a higher average nightly rental rate than they’d get with annual leases, Sean Gallagher said. 

“It’s turnkey. We’re going to do the management, we’re going to get the tenants, we’re going to pull all of that together for you,” he said, adding that the properties must fit the company standards to be accepted. 

Lucio said Texas Corporate Homes’ model represents the future of corporate housing because people migrate to what they’re comfortable with, including staying in a single-family home and booking online. 

Having a large stock of housing supply allows Texas Corporate Homes to be flexible and extend stays on short notice, easing tension on insurance broker partners, Sean Gallagher said.

And unlike other short-term rentals, renters can bring their families and tend to feel more at home, meaning they take good care of the houses, Sean Gallagher said, adding that they’ve never had to evict a tenant. 

“That’s unheard of to have hundreds of homes for multiple years and have no evictions,” he said. “There’s less wear and tear as a result of that, less headaches as a result of that, better financial performance, better economics.” 

Lodgeur is also keenly focused on its bottom line. The company now partners with two communities in Houston, Mid Main Lofts and Elan Med Center, but it has another half-dozen deals in the works, Long said. Operators are enticed by the potential to make above-market rent and fill units that would otherwise sit vacant. 

“Most communities are happy if they get to 90%,” Long said. “If you've got 400 doors, even 5% is still 20 units sitting there.”

Lodgeur doesn’t take rentable units out of circulation, but rather shifts vacant units to become profitable, he said.

“While we often compare our returns to the market rent they may have gotten, more often than not, we compete with zero,” Long said. “These are units sitting empty, especially if we're there during a lease-up, or maybe there's been a change of ownership, or an asset has been underperforming. Those are units sitting empty, costing them money, and suddenly they're making money.”