Not why hotels? But, looking for any thoughts on WhyHotel the company? I've researched the company and believe it to be a relatively cool idea but it also wreaks of WeWork in a way. Am I jaded because of it's start up culture/feel in the aftermath of the WeWork kerfuffle?
Looks like they are building out their our real estate arm and will be taking on their own developments. This is an open debate on all fronts. Cool concept? What's their longevity? They promise equity in the company, but coming from RE where everyone is fighting for participation in an asset, is this worthwhile?
Hi babybaboon, any of these discussions helpful:
Fingers crossed that one of those helps you.
bump
It doesn't seem very sustainable, like they are picking up scraps while they last. Aren't the last apartments to lease up usually the least desireable? However, I can see developers wanting to partner with them to increase first year NOI. Would be interested to hear their development plans.
Bump up that DSCR in yr 2 to hit your covenants
Don't disagree. Seems they've started their own development arm where they aim to take on ground-up developments of their own, or at the least in a partnership structure.
I don't see them being able to take on their own developments at the moment and will most likely need a partner. So far on what they have done, some fairly well known partners though: Equity Residential, AvalonBay, Brookfield.
WhyHotels is a viable concept. I wonder why they decided to take on their own development, unlike their competitors Sonder, Domio, and Lyric. It seems like most like the asset light model allowing them to stretch their dollar with signing leases instead purchase contracts. Perhaps they are plan to generate income from the sale of the building once complete.
Another benefit is they have control the design of the look and layout of their product. Maybe they are seeing this as a longterm play. By building their own they won't be at the mercy of the developer one the lease is up and have to flexibility to do as they wish.
Know a bunch of these guys personally and have worked with them conceptually on a couple of deals. It's a smart idea, but I just don't see how it is scalable into a larger business with a trajectory for growth that isn't highly reliable on MF permit starts, particularly in the high rise department.
The whole idea relies on the concept that a project turns units faster than you can lease them, so taking a slug of units offline to generate interim income helps with your model. This really only occurs on very large multifamily deals or high-rise deals, maybe in some case podium. Type V deals typically don't turn units fast enough for this to make sense.
@ Ricky Rosay would you join them? Why/why not? Don't need a dissertation. Just trying to gauge interest in the overall community when everyone and their mother seems to be striving for PE/REIB.
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