Airbnb and its partners buy apartment complexes
Airbnb has purchased apartment buildings in Kissimmee and Nashville and will lease them to a mix of long-term tenants and short-term visitors. And the Silicon Valley home rental giant plans to invest up to $ 200 million in a joint venture to buy and transform up to five other apartment complexes in Florida.
The tenants of these quasi-hotels will be encouraged to rent their accommodation through Airbnb for almost half of the year and will share the profits with the owner. Tenants will keep 75 percent of their profits after taxes and local charges are paid. The owner will receive the remaining 25 percent.
Miami-based Airbnb multi-family partner, Niido, plans to buy new rental properties and under construction in cities like Miami, Fort Lauderdale and Tampa and convert them into apartment towers. The joint venture is supported by an investment of up to $ 200 million from Brookfield Property Partners LP.
The Airbnb-Niido joint venture’s first purchase this year was the 324-unit Domain apartment complex in Kissimmee, just north of I-4 off State Road 429.
The partners’ latest project is the takeover of an existing 328-unit building, the Olmsted, in the SoBro neighborhood of downtown Nashville, a popular tourist destination for music lovers and bachelor parties. Niido bought the building this month. Under Niido ownership, current residents of Olmsted will be encouraged to sublet their units to Airbnb travelers for a maximum of 180 days per year. Airbnb and Niido will take 25 percent of the income residents generate from the roommate. The two companies will jointly rent part of the remaining vacant accommodation via the Airbnb platform for short stays.
The concept, called Niido Powered by Airbnb, is part of a larger Airbnb effort to team up with real estate developers and facility managers, a group that has often argued that the colocation company allows tenants to under – rent their apartments illegally.
By the end of 2019, Airbnb and Niido – a play on the Spanish word “nido,” which means nest – will open up to 14 Airbnb-branded resorts across the country, said Cindy Diffenderfer, co-founder and Marketing Director of Niido Powered. by Airbnb.
“We have a pretty aggressive growth strategy,” Diffenderfer said. A representative for Niido said plans could change. Airbnb declined to comment.
As part of a campaign to broaden its appeal to a higher-end clientele, Airbnb has added more hotels and similar listings under the Airbnb Plus label. These sites receive regular visits from an inspector to confirm that towels are fresh, linens match, and appliances commonly found in hotels, including hairdryers and irons, are in stock.
Partnering with real estate developers like Niido will help Airbnb deliver a more hotel-like experience while operating from homes and apartments.
However, not all residents are happy with their new neighbors. This year, when Niido and Airbnb revealed the conversion of the Domain apartment complex in Kissimmee, it prompted some residents to say they “didn’t agree to living in a hotel.”
In Nashville, there was a similar surprise after Niido Powered by Airbnb informed residents of Olmsted that their apartment building would become a shared apartment complex. “We are delighted to announce the recent acquisition of your beautiful community,” said a letter sent to residents on behalf of Diffenderfer and its Niido partners.
Residents already living in the building say they had no idea Niido would take over their leases or that their building would be turned into a permanent Airbnb complex. A representative from Niido said the real estate company was aware of the complaints and was focused on “building strong and happy communities in Nashville and Kissimmee.”