MAY 24, 2019 RANDYL DRUMMER
WhyHotel Expands Pop-Up Hotel Concept to High-Rise Development As Competition Heats Up
WhyHotel Chief Executive Jason Fudin said the high-rises will be designed and built from the ground up "to blur the lines between hospitality, home, work and play."
With its pop ups that are a cross between an Airbnb property and a hotel, with some shared commercial space elements, WhyHotel helps developers by generating revenue on new units that might otherwise sit empty before they're leased. But other companies are eyeing the market, including short-term rental giant Airbnb, which has an estimated valuation of $35 billion and is widely anticipated to go public.
The competition is heating up, with Airbnb wanting in on WhyHotel's business and leading a $160 million funding round for Lyric, a San Francisco startup that leases entire apartment floors in 13 cities and lists them to travelers on Airbnb's and its own website.
Brookfield Property Partners last year invested $90 million to acquire a Nashville, Tennessee, apartment development run by Niido, a Miami-based Airbnb concept in which apartments are built specifically for use by the giant short-term rental company.
In downtown Minneapolis, local developer United Properties is pitching a new residential tower as an opportunity for investors to be condominium owners as well as boutique hotel operators.
Started at Vornado
Fudin, a former vice president of strategic projects at New York City-based developer Vornado Realty Trust, and Bao Vuong, a former executive for developer PN Hoffman of Washington, D.C., founded WhyHotel as a venture-funded startup that was launched as an independent entity from Vornado in 2017.
It was never Fudin's goal for the company to stick with offering hotel rooms in another company's building. It's always been part of the company's business plan to its own projects and go national, he said.
"We're a set of people that are getting back to our roots in development," Fudin told CoStar News.
The alternative lodging firm’s name derives from the core thesis of these businesses: Why should travelers stay at a hotel when they can stay or live in a brand-new apartment with all the comforts of home?
WhyHotel operates three pop-up hotels in new luxury apartment buildings in Arlington, Virginia, Washington, D.C., and Baltimore. About 150 pop-up units opened in April in Arlington’s Ballston Quarter at a 22-story apartment at 700 N. Randolph St. developed by Brookfield Properties. The Baltimore hotel operates in 160 pop ups in an 18-story apartment building in Baltimore, and WhyHotel has 95 pop up unit in D.C. at First and K streets in the NoMa district.
The company employs about 65 people and expects to nearly double in size by the end of the year and have a workforce of over 400 by the end of 2020. In spite of the new Hospitality Living development business, Fudin expects to open hundreds of more pop-ups across the country through its partnerships with apartment landlords.
"The pace at which we open pop-up hotels is about to get very quick. We have a number of cities on our road map," Fudin said.
WhyHotel plans to enter both the West and East coasts simultaneously over the next three years with its new business of buildings developed from scratch. The company hasn't announced the location of its first ground-up development, but its strategy requires having pop-ups up and running in a city before committing to its own development, putting the D.C. area high on the list of candidates for development on WhyHotels own account, Fudin said.
"Our view is once you're able to deliver flexible assets that sit between traditional multifamily and hospitality, the world won't go back to building inflexible assets with buildings that can only have one user forever," Fudin said. "The way people consume physical space exists more and more on a spectrum. People are always working and never working. They don't live and work in blocks of time between 7 a.m. and 5 p.m. anymore."
The company announced in December it received $10 million in venture capital funding led by Highland Capital Partners to launch three new pop-up hotels in apartments in Virginia, including 150 WhyHotel units at the Centro Arlington, being launched with Orr Partners and Weingarten Realty. WhyHotel will continue to open satellite offices and launch pop-up hotels in new apartment buildings across the country while expanding the new Hospitality Living development business.
The company recruited Will Hu from San Francisco-based developer Prado Group to lead the expansion of the WhyHotel platform, along with several other development, design and marketing personnel.
WhyHotel Expands Pop-Up Hotel Concept to High-Rise Development As Competition Heats Up
WhyHotel Chief Executive Jason Fudin said the high-rises will be designed and built from the ground up "to blur the lines between hospitality, home, work and play."
With its pop ups that are a cross between an Airbnb property and a hotel, with some shared commercial space elements, WhyHotel helps developers by generating revenue on new units that might otherwise sit empty before they're leased. But other companies are eyeing the market, including short-term rental giant Airbnb, which has an estimated valuation of $35 billion and is widely anticipated to go public.
The competition is heating up, with Airbnb wanting in on WhyHotel's business and leading a $160 million funding round for Lyric, a San Francisco startup that leases entire apartment floors in 13 cities and lists them to travelers on Airbnb's and its own website.
Brookfield Property Partners last year invested $90 million to acquire a Nashville, Tennessee, apartment development run by Niido, a Miami-based Airbnb concept in which apartments are built specifically for use by the giant short-term rental company.
In downtown Minneapolis, local developer United Properties is pitching a new residential tower as an opportunity for investors to be condominium owners as well as boutique hotel operators.
Started at Vornado
Fudin, a former vice president of strategic projects at New York City-based developer Vornado Realty Trust, and Bao Vuong, a former executive for developer PN Hoffman of Washington, D.C., founded WhyHotel as a venture-funded startup that was launched as an independent entity from Vornado in 2017.
It was never Fudin's goal for the company to stick with offering hotel rooms in another company's building. It's always been part of the company's business plan to its own projects and go national, he said.
"We're a set of people that are getting back to our roots in development," Fudin told CoStar News.
The alternative lodging firm’s name derives from the core thesis of these businesses: Why should travelers stay at a hotel when they can stay or live in a brand-new apartment with all the comforts of home?
WhyHotel operates three pop-up hotels in new luxury apartment buildings in Arlington, Virginia, Washington, D.C., and Baltimore. About 150 pop-up units opened in April in Arlington’s Ballston Quarter at a 22-story apartment at 700 N. Randolph St. developed by Brookfield Properties. The Baltimore hotel operates in 160 pop ups in an 18-story apartment building in Baltimore, and WhyHotel has 95 pop up unit in D.C. at First and K streets in the NoMa district.
The company employs about 65 people and expects to nearly double in size by the end of the year and have a workforce of over 400 by the end of 2020. In spite of the new Hospitality Living development business, Fudin expects to open hundreds of more pop-ups across the country through its partnerships with apartment landlords.
"The pace at which we open pop-up hotels is about to get very quick. We have a number of cities on our road map," Fudin said.
WhyHotel plans to enter both the West and East coasts simultaneously over the next three years with its new business of buildings developed from scratch. The company hasn't announced the location of its first ground-up development, but its strategy requires having pop-ups up and running in a city before committing to its own development, putting the D.C. area high on the list of candidates for development on WhyHotels own account, Fudin said.
"Our view is once you're able to deliver flexible assets that sit between traditional multifamily and hospitality, the world won't go back to building inflexible assets with buildings that can only have one user forever," Fudin said. "The way people consume physical space exists more and more on a spectrum. People are always working and never working. They don't live and work in blocks of time between 7 a.m. and 5 p.m. anymore."
The company announced in December it received $10 million in venture capital funding led by Highland Capital Partners to launch three new pop-up hotels in apartments in Virginia, including 150 WhyHotel units at the Centro Arlington, being launched with Orr Partners and Weingarten Realty. WhyHotel will continue to open satellite offices and launch pop-up hotels in new apartment buildings across the country while expanding the new Hospitality Living development business.
The company recruited Will Hu from San Francisco-based developer Prado Group to lead the expansion of the WhyHotel platform, along with several other development, design and marketing personnel.