US: Miami-based multifamily management company Orion Haus, which creates short-term rental friendly buildings, is adding ten buildings and 1,588 units to its domestic portfolio, including in Atlanta, Austin, Houston, Memphis and Orlando, in what it claims to be “the largest short-term rental multifamily deal in history”.
The transaction will allow Orion Haus to better serve its renter community as it seeks to capitalise on escalating demand for flexible housing solutions. It may also play a part in resolving supply issues that were referenced in Airbnb’s recent Q1 earnings call, when the firm said it was lacking the numbers of hosts it would need to manage the surge of travellers venturing out after the pandemic.
The company is undergoing rapid growth and has already signed and verified more than 8,000 pre-lease agreements for 2021 and 2022 in markets such as Fort Lauderdale and Tampa Bay / Clearwater, Florida; Charleston, South Carolina; Charlotte, North Carolina; Dallas, Texas; and New Orleans, Louisiana.
Though Orion Haus’ short-term rental inventory is only slightly below that of Sonder, traditionally a master lease company that is set to go public via a special purpose acquisition company [SPAC] at a $2.5 billion valuation, CFO Scott Liebman was quick to point out that his firm operates under a different business model.
He said: “Orion Haus is not a master-lease apartment-hotel company. Orion Haus is an entire-building system that enables home-sharing for all residents, allowing residents to create personal income and building owners to see double digit increases in NOI [net operating income].
“When a renter sees that they have $7,000 in bookings in the months following their lease renewal — they renew.
“The national average for turnover is 52 per cent, but Orion Haus anticipates only 35 per cent churn. This reduction in turnover combined with a reduction in vacancy, rent concessions, and marketing costs saves our building owners as much as 62 per cent each year,” he added.
Founded in 2020, Orion Haus claims its properties create ten per cent higher NOI in managing multifamily communities and increased income from demand for longer-term leases. Its residents can sublet their available units for as long as they wish, from one night to an extended stay within a 12-month lease, and all properties are fully-staffed to assist residents and guests alike.
More than 15,000 renters are currently on Orion Haus’ waiting list and are set to sign 12-month leases at the company’s home-sharing communities.
The company is planning for a further acceleration in growth of its portfolio and brand, according to Liebman.
He said: “We are looking for immediate deal-flow in the South East. We could easily fill 25 empty buildings this year.”