People around the world use Airbnb Inc. to rent out their apartments to guests, sometimes rankling building owners and landlords in the process. Now Airbnb is getting more directly involved in the real-estate side of the business.
The San Francisco company said it’s working with Miami-based developer Newgard Development Group to design a 324-unit apartment building that will carry the Airbnb name. Tenants will be encouraged to sublet their spaces online, and guests will have access to amenities commonly found in hotels.
It’s the latest step toward legitimizing the site, said JaJa Jackson, a global partnerships director at Airbnb. “We’re trying to make sure that home-sharing is not done in the shadows,” he said. “This partnership shows how landlords, developers and Airbnb can work together.”
The Airbnb-branded building fits into a long-term strategy to win over real-estate developers and facility-management companies that have been resistant to allowing Airbnb rentals. Since the startup was founded in 2008, landlords have argued it violates zoning laws and operates as an illegal hotel. Critics have also said abundant rentals drive up housing costs and disrupt neighborhoods.
To quell criticism, Airbnb began offering large building management companies a share of hosts’ revenue last year. The company, valued at USD31 billion, lets landlords who agree to make Airbnb the exclusive rental site for tenants receive as much as 15 percent of earnings from hosts in their buildings. The profit-share agreement is designed to encourage landlords to commit to allowing tenants to use Airbnb without repercussions.
The first building in the new venture, called Niido Powered by Airbnb, will be in Kissimmee, Florida. It will feature keyless entry and on-demand concierge services, like cleaning and luggage storage. Tenants will be permitted to sublet their units only on Airbnb for up to 180 nights a year, the companies said.
Airbnb will provide design assistance but won’t have an ownership interest in the building. Newgard will take a piece of profits generated from Airbnb rentals and plans to develop similar spaces in the Southeastern U.S. Airbnb said the Florida complex is expected to open in the first quarter next year. Olivia Zaleski, Bloomberg
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