Sell for More Trivia is a weekly blog series that playfully presents a trivia question about commercial real estate.
Are apartments rented to business travelers short term? Yes. Meet Lyric, a start-up that transforms luxury apartments into short-term rentals for business travelers.
Lyric transforms premium apartments into studios with hotel-quality cleaning services and around-the-clock online support for business travelers looking for short-term visits or stays of as long as 200 days.
And Airbnb is taking notice by leading a $160 million funding round for the small, luxury-rental apartment startup.
With only 380 apartments across the U.S., Lyric may seem like an insignificant investment for a powerhouse like Airbnb. But its interest likely stems more from Lyric’s mission: to change the negative reputation of the short-term rental industry, especially in urban environments.
“We are really good at regulatory compliance,” Lyric’s co-founder and Chief Executive Officer Andrew Kitchell said in an interview. The startup is fully compliant in all 13 cities it operates in, he said. “We don’t sneak into cities or buildings, we walk in the front door and we introduce ourselves.”
Airbnb changed the way people travel by persuading millions to open up their homes to strangers, but it’s also run afoul of city regulations in some of its biggest markets, including New York and Paris. Real estate firms and building owners are loathe to trust short term rental providers today.
For example, Lyric was the first company to be issued a short-term rental permit in Austin and Nashville. It’s the only company legally allowed to operate short-term rentals in Orlando.
Last valued at about $31 billion, Airbnb has been working to expand listings and transform its identity as it gears up for an IPO likely next year. The company wants to shed its image as a disruptive startup that doesn’t play by the rules and instead aims to become a regulatory-compliant one-stop shop for travelers to book flights, accommodation and tourist experiences.
Hence the appeal of Lyric. “Lyric has combined the latest technology, strong partnerships with the real estate community and cutting-edge design, and we are excited to support their work,” said Airbnb’s president of homes, Greg Greeley.
The latest financing round brings Lyric’s total funds raised to $175 million. The cash will allow it to expand to as many as 2,000 units, and invest in a proprietary technology and data platform.
It’s a whole new world. Buckle up and enjoy the ride.
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About Beau Beach, CCIM
Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee, South Florida and Chicago markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached at 414.324.4938, 615.603.9770, click to schedule a call or Beau@ProwessIRES.com