Airbnb Disruption: Developers Cashing in on Short-Term Stays
Developers are catching onto the trend of Airbnb-ing their units for substantial premiums. Luxury building owners like the Naftali Group are exploring this option by upping the price for short-term tenants.
"There's always demand for short-term housing in Manhattan," Citi Habitats president Gary Malin says. People come from all different areas to work here, he says, "and they'll pay dearly for it."
At the Naftali's the Arthur, a one-bedroom unit is $5.5k a month on a lease, with short-term rates going for $7k. Even traditional hotels are looking at extended-stay models.
Normal tenants subleasing their units have been doing this for years, finding themselves in a gray legal area. Regardless, in NYC alone, Airbnb'ers have earned $282M between 2010 and 2014, with some turning it into a pretty successful side business.
Before Airbnb's flexible business model, NYC's short-term rental market was dominated by just a few companies like Oakwood, which rented furnished places, since the management process was complicated for normal landlords.
Instead of dismissing the market as a fad—or even fighting it—power brokers could be better off tapping into the sector instead, co-founder of hospitality startup onefinestay Evan Frank told The Real Deal.
“Institutions in New York are beginning to realize that the sharing economy is a trend that they may want to figure out how to be part of," he says, "versus a fringe trend that’s going to go away.” [TRD]
