It’s a dream for landlords and property owners: a reliable tenant who has a high income to pay on time, is willing to shell out a higher margin for a few extra niceties, oh and they treat the unit with the utmost respect (no wild parties here).
These tenants do exist, but it’s a matter of them finding you. How so? It’s about getting your rental “corporate housing” ready. Premium furnishings, business traveler amenities, getting the word out to relocation specialists and minimizing gaps between leases can become too much work for one landlord. Companies that specialize in the full-stack, end-to-end renting out of corporate housing like Blueground, can lease your apartment and get it in front of the right business professionals but allow you to scale up your rental portfolio through higher returns and freeing up your time from operational tasks.
Welcome Home: A rise in US corporate housing
In 2017, the corporate housing market —with leases over 30 days —rose 13% to $3.62 billion, according to the Highland Group. It was the fifth consecutive year of growth pointing to the evolving needs of an increasingly mobile and global workforce. Further, the number of long-term corporate housing rentals rose by another 6.5% to 71,201 in 2017, with a large majority of these being found in premium luxury buildings. As the US economy continues to grow, so will demand for furnished apartments with increased connectivity and uniqueness by business professionals.
On a global scale, overseas assignments are expected to grow by 50% by 2020 according to PWC’s Talent Mobility report. When it comes to 1-12 month assignments, Finaccord’s Global Expatriates data points to a similar trend with 2 million business travelers worldwide. That number then jumps to 5 million long-term corporate expats when looking at stays of more than 13 months. Compound those numbers with a global business travel sector that is set to top $1.6 trillion by 2020 (according to the Global Business Travel Association) and you’ve got a fertile market to participate in.
The extra margin is in the details
Corporate housing and extended stay hotels may conjure images of area carpeting, generic wall art, and stained lampshades and this is exactly why premium corporate housing continues to stand out. In tech speak, the real estate market is seeing its corporate housing sphere “disrupted” by partners like Blueground who use technology (Guest app, data analytics), economies of scale (from 9 global cities) and industry-leading knowledge of tenant and landlord needs.
If you can imagine the top-end service and amenities that business professionals expect when flying first class, then you may already have an idea of how demanding this tenant segment can be week-on-week. Beyond being a place to sleep at the end of the day, corporate tenants are looking for those added bonuses in 2019. High-speed internet and a dedicated workspace are the bare minimums, with smart home connectivity and 24/7 concierge services becoming new norms. When it comes to decor, a new standard in having a cozy and homey space is what differentiates a quality 1-12+ month rental unit from being an interim weekly rental that a businessperson will use while they house hunt. Things like a washer-dryer in unit, a rain shower head, sleek furnishings, and premium linens keep business tenants renewing month after month.
The decerning business traveler also wants those four- or five-star hotel conveniences extended to their mid- to long-term stay. That means the ability to order in extra towels, or in place of room service, having groceries waiting for them at home at the end of the workday. Blueground tenants can access a neighborhood guide via their Guest App with a list of recommended gyms, pharmacies and grocery stores nearby. Beautifully furnished with designer furniture, eye-catching accent walls, and high-end electronics; corporate housing now has a new face.
Furthermore, corporate housing is appealing to more than just the newly arrived businessperson and project-based consultants. A modernly furnished apartment also attracts other well-off renters. For examples, some locals who need a month-by-month rental or simply can’t be bothered with owning furniture may opt for a serviced apartment. For the wealthy digital nomad, a furnished rental offers a comfortable place to stay for part of the year. And how about students? For those who can afford premium housing, a monthly furnished rental saves them the need to purchase furniture during their orientation week and dealing with setting up utilities at the start and end of the school year. Any student who has juggled studying for final exams and the stress of finding a summer sublessee knows it’s barely worth the hassle.
Have you heard? Network effects count
Corporate Housing in 2019 will also benefit from network effects, online and offline. Whereas individual landlords are limited to having a presence in one city, corporate housing companies are able to “move with” their renters as they relocate from one city to the next. In the same way that a traveler may build a brand loyalty and service expectation with a luxury hotel chain, corporate housing renters begin to expect and trust the same of their living experience when staying with a corporate housing partner in multiple cities.
When corporate housing partners work with HR and relocation specialists, this word-of-mouth referral gets around and tenants begin to seek out a specific corporate housing company for more and more of their employees.
Operating a network of corporate furnished apartments also allows for a streamlined listing management system. Blueground, for example, is able to coordinate multiple listings in real time to be sure that corporate renters are able to find their apartments across channels like 2nd Address. When managing a vast portfolio of serviced apartments in one city, renters also have the ability to switch between units part way through their lease should they fancy experiencing another neighborhood of their new city, or perhaps if a partner or their family decides to join them.
Spotting a missed corporate housing opportunity
If you’re sitting on a studio to a three-bedroom apartment unit in a central location, you may have a high potential corporate housing space in your hands. An advantageous location near public transit or having a walkable location to major office towers and neighborhood life are at the top of the list of relocating business people. Lastly, if your rental is found in a newly built or recently renovated unit, you can also count your apartment as being a corporate rental waiting to happen.