Airbnb has acquired serviced apartment rentals marketplace Urbandoor. What it really bought into was a direct-connect into the world of global corporate real estate. Greystar Real Estate Partners was one of the early backers of Urbandoor, which is essentially an online booking platform (the Airbnb) for corporate rental housing.
The Urbandoor platform launched in 2015 to introduce Instant Booking into the managed multifamily category, which went through a tsunami of consolidation during the period following the housing crisis of 2008 and the global recession that followed. Using the service requires a corporate account; companies use Urbandoor to house mobile employees as an alternative to extended-stay hotels.
Greystar Real Estate Partners works on the supply side of the equation. The company is a leader in rental housing management, investing, and construction. Coverage extends beyond corporate housing and into student, multifamily, and senior living. The group has over 14,000 employees covering 179 global markets. The number of corporate apartments within the portfolio is not known, but coverage is extensive throughout the United States.
From the website:
“Greystar’s business model is unique in its ability to own, operate, and develop collegiate, multifamily, corporate, and senior housing across the globe. Building a global platform with a local presence, Greystar continues to expand its geographic reach around the world, bringing a globally interconnected professional rental housing platform and industry funded with institutional capital to countries where the sector does not yet exist.”
What does this tie-in mean for Airbnb?
The sharing economy app turned rental property marketing & distribution platform has steadily moved into corporate housing with its Airbnb for Work program, which it originally launched in 2015 as Airbnb for Business. The company has ambitiously diversified away from owner-occupied rentals in order to scale.
Mobile and cloud computing has been a game changer in travel accommodations and urban housing more generally. Temporary and on-demand renting has transformed neighborhoods with sometimes detrimental overflows of non-locals. City officials have responded in kind with bans and added fees targeting rental marketplaces like Airbnb, to compensate for the negative impacts caused by rapid disruption.
This has posed a core challenge to Airbnb’s long-run growth because of supply constraints with owner-occupied housing i.e. individual homeowners and renters looking to fill their dwellings with paying renters while away. Moving into hotels (acquisition of Hotel Tonight), alternative accommodations (investment into Lyric) and corporate housing (expansion of Airbnb for Work) gives Airbnb room to grow into an evolving accommodations landscape.
For now, Urbandoor will operate as a stand-alone brand. Eventually, according to official statements, Greystar inventory will become bookable via Airbnb for Work, which is the company’s corporate service already working with thousands of companies looking to rethink the way they manage their global workforce.
Growing into the corporate space will help cushion Airbnb against competitors like Booking Holdings, which have also doubled-down on alternative accommodations in recent years.
Companies like Greystar are in a good position as a) work shifts increasingly toward location independence and distributed teams and b) as real estate shifts increasingly toward rented (rather than owned) spaces. The implications for individual property renters and smaller property managers are real, as Airbnb turns towards larger groups that can negotiate better terms. This could also open opportunity for niche platforms looking to fill the gaps left by Airbnb. The fate of the sharing economy will increasingly fall into the hands of corporate real estate managers, condo associations, and city managers - rather than individuals.