Twenty-five years ago the term “corporate housing” may not have meant very much to you — in fact, it may have been a completely foreign term.
In 2014 the industry brought in $2.73 billion, which was a 4 percent increase over the prior year. The global corporate housing market is thriving today as more people are traveling on business or relocating across the country, and Furnished Quarters in New York City has been a leader in the market from the start.
“We are owned by a family who has about an 80-year history in the real estate industry in New York City,”said Craig Partin, chief sales officer of Furnished Quarters. “That’s where the business came from. We have very long-standing relationships with large management companies and business management companies.”
The company owns 10 historic brownstones in the city and rents out blocks of apartment units in buildings throughout Manhattan and the Northeast region of the country.
In order to keep the business running efficiently, the company purchases blocks of at least 10 units in a building. Corporate apartment leases run for 30 days or more.
“We have a lot of corporate guests who are being relocated for their jobs, often at an executive level, so it creates a nice resident profile. It adds to the culture of the building. People get very testy if they see a different person in the elevator every six days, three days, whatever they are doing with Airbnb,” Partin said.
Furnished Quarters prides itself on being not only a good business partner to landlords and property managers, but also a good neighbor to the apartment owners and renters who reside in the buildings full time.
For the fourth year in a row, the most popular reason for using corporate housing was relocation, which was followed by projects and on-site training.
Projects and training makes up for more than half of the total demand for corporate housing, a trend that has taken place for several years in a row.
According to Mary Ann Passi, chief executive officer of Corporate Housing Providers Association (CHPA), the average corporate housing stay length is 96 days.
Working with business travelers who spend time in cities throughout the world, Passi said that corporate housing is a safe and secure option for people who are saying 30 or more days in a specific city.
Furnished Quarters’ next plan is opening up a residential hotel. With the demand in NYC being for larger space for people to stay in, there is a huge market for people who are coming to NYC who aren’t going to be there for a full month, but instead two or three weeks.
The company sought to provide an alternative to other short-term leasing options other than hotels while still following rules and regulations. The brand will open its first location in Manhattan this coming fall, and Furnished Quarters hopes to expand the brand to new markets.
“We saw the demand and went out to a property owner who was renovating a building, and we negotiated with them and with the city to get four floors of that building zoned legally as a hotel,” Partin said. “We’ll be opening a new brand of ours called Q&A Residential Hotel, and those will be full-sized apartments: studio, one- and two-bedroom units that we can legally rent for less than 30 days with full kitchens.”
Inventory and availability are still issues that plague both the traditional rental market and corporate housing markets in New York City.
“I think that people feel more secure in relocating employees and growing their companies again,” Partin said.
“Urban markets have had a slow rebound in construction, which couples with the fact that it’s harder for people to get a mortgage who want to buy. That adds more people to the rental space. Until new construction catches up to this demand, maybe in 2017/2018, this is going to continue to happen in major urban markets.”
And although Partin admits that the corporate housing market does indeed cut into the inventory of the traditional rental market, he believes that the demand driving it is so strong that it’s more so a complement than a competitor.
“People who are traveling a lot don’t want to stay in hotels,” he said. “They don’t want to be in 200 square feet. They want to be in an environment that feels like home.”