Airbnb gets $200 million boost for apartment business that resembles hotels
Airbnb might be getting set to join the exact business that it has worked so hard to disrupt; the traditional hotel industry
For the past decade or so, the tech startup Airbnb has worked tirelessly to disrupt the traditional hotel business, offering users the chance to rent out their rooms and homes to travelers at whatever rate they see fit.
Now, the company might be getting set to join the exact business that it has worked so hard to disrupt, as multifamily developers are just now starting to explore the idea of constructing apartments that are so-called Airbnb friendly. What this means is that these developers are entering into, for example, $200 million equity investment programs with Niido, which is a new hotel-like concept that Airbnb first introduced back in October. The specific company from this $200 million deal is Brookfield Property Partners, but Silverpeak Real Estate has also committed $20 million to the venture.
To be clear, however, Niido is being run by Miami’s Newgard Development Group, and the $220 million of investments it has recently garnered will go the Niido entity, instead of going directly to Airbnb. What this means is that a shift is now taking place in how landlords and other real estate developers view the concept of Airbnb. To be sure, the hospitality industry is still largely trying to combat the concept, lobbying policymakers to take action on their half by banning or limiting Airbnb, while also doing their best to offer amenities and features such as loyalty and incentive programs that Airbnb simply can’t compete with.
And, to be certain, not all developers and real estate companies are on board with the real estate concept, as some are currently suing Airbnb to try and stop their own tenants from using the service to rent their units out to travelers.
Brookfield, however, may serve as somewhat of a bellwether for the direction that the industry as a whole is headed, with that company ranking as a major global commercial real estate entity, one that has roughly $68 billion in total assets, while its parent company meanwhile, Brookfield Asset Management, is said to have more than $265 billion in total assets under its management. Simply put, a company of this size going in on supporting Airbnb with that kind of monetary investment shows that there are real estate companies out there that are willing to embrace home sharing instead of continuing to fight it, and the smart money, so to speak, would be on other developers and investors beginning to follow suit soon.
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