Investors Bet Flexible Leases Are a Lasting Trend
Remote work sparked demand for short-term housing with flexible terms. Some estimate the number of workers who remain fully remote will eventually top out at about 20%.
NEW YORK – Investors believe one pandemic-related trend will offer up long-term results: short-term apartment leases. They’re rushing to invest in such buildings that can offer flexible short-term apartment rentals, even as more workers return to the office.
Over the past year, companies like Blueground, June Homes, and Landing have added thousands of units to their platforms, The Wall Street Journal reports. They’re raising millions in recent funding rounds as short-term rentals win more attention from Wall Street.
Remote work sparked a demand for short-term housing with flexible terms. About half of the nation’s office workers continue to work remotely. Short-term housing providers believe the number of workers who remain fully remote will eventually top out at about 20%.
“That’s about 36 million workers,” Kulveer Taggar, co-founder and CEO of Zeus Living, which specializes in single-family homes, told The Wall Street Journal.
Even renters who return to the office may favor a short-term rental over a full year’s lease.
Many of these short-term lease providers sublet to tenants through a digital platform on a month-to-month basis. Many do not require a security deposit either, The Wall Street Journal reports. Many of the companies also offer fully furnished units.
Blueground, which offers fully furnished units, offers flexible arrangements at a higher cost. For example, tenants may have to pay anywhere between 15% to 100% more than what they would for a traditional 12-month lease for an unfurnished apartment.
June Homes, in contrast, offers tenants the option to rent any unit unfurnished, furnished, or partially furnished. It also offers a shared apartment option for many of its properties as it targets younger generations.
Source: “Short-Stay Housing Companies Are Confident Even as Workers Return to the Office,” The Wall Street Journal (Oct. 5, 2021) [Login required]
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