RealtyShares Featured as Financing Solution by Airbnb

The business models around the multifamily housing industry have changed dramatically in the last few years. In the past, building owners had a narrow range of options for increasing their income with business plans that centered around maximizing occupancy and rents. Home sharing through Airbnb has fundamentally changed this. Landlords can now earn additional income through the Friendly Buildings Program by giving tenants the opportunity to share space on Airbnb. Leasing teams can use Airbnb as a lease-up tool, giving prospective tenants the opportunity to see what it’s like to live in the community before they sign a lease. Given the additional flexibility afforded to multifamily buildings with an Airbnb angle, it’s no surprise that apartment listings are on the rise. Today there are more than 15,000 units offered by landlords who are part of the Friendly Buildings Program, a program that allows landlords the ability to manage Airbnb activity in their buildings and share in the additional rental income.

While the appetite for this Airbnb offering is growing within the multifamily business community, property developers often face challenges when raising capital to build, buy, or renovate their buildings and optimize them for home sharing. Institutional capital providers, typically, do not fully understand the relatively new income opportunity offered by short-term rentals.

At RealtyShares, we look at these things a bit differently. Our underwriting team brings decades of experience at the intersection of multifamily and hospitality, and unlike conventional lenders, we have the tools to evaluate how short-term rentals may affect a potential project. We also have a diverse mix of capital sources, including a platform of tech-forward accredited investors who, as consumers themselves, are quite familiar with the benefits of short-term rentals.

This has given us a considerable competitive advantage in a number of financing opportunities over the past few years, allowing us to finance opportunities that others don’t have the expertise or capital resources to handle. Here’s one example:

Recently, RealtyShares was approached by a real estate investor who was seeking to acquire a multifamily rental property in an upscale vacation market. However, due to the very high income generated by this property, largely through its participation in short-term rental platforms like Airbnb, he was paying a much higher price for the asset than he would have if this short-term rental income didn’t exist (i.e. if the property had merely pursued a long-term rental model).

As a result, other lenders were having difficulty reconciling this investor’s purchase price with comparable, primarily long-term rental property sales within the target property’s competitive marketplace. Having confidence in the short-term rental model allowed RealtyShares to lend based upon the full income profile of the property and provide sufficient proceeds to complete this investor’s acquisition.

This is just one example of the hundreds of multifamily projects RealtyShares has worked on. We are excited to be on the leading frontier of financing and filling this gap, to the potential benefit to both project sponsors and investors.

Interested in learning more about our debt and equity financing solutions for multifamily projects with an Airbnb angle? Check out our Airbnb Multifamily Financing Overview or contact our Business Development team at bizdev@realtyshares.com.

Ed Forst
Ed Forst
Chief Executive Officer at RealtyShares
Ed is the Chief Executive Officer of RealtyShares. Previously, Ed served as president and Chief Executive Officer of Cushman & Wakefield until the firm's sale in September 2015. Forst joined C&W after a 16-year career at Goldman, Sachs & Co., serving as global co-head of the Investment Management Division, as a member of the firm's global management committee and previously as the firm's chief administrative officer.

While at Goldman Sachs, Forst was elected Chairman of the Securities Industry and Financial Markets Association (SIFMA) and its predecessor The Bond Market Associations. From 2008-2009, Ed was selected to be the first executive vice president and principal operating officer of Harvard University, leading its non-academic affairs. Also, Forst served as an Advisor to the Secretary of Treasury of the United States during the 2008 financial crisis.

Ed recently completed 10 years as Treasurer, Trustee and member of the executive committee of Carnegie Hall. He is a member of the board of advisors of the Yale University School of Management; Executive Committee of the Harvard University Capital Campaign; and is an Executive Partner of Solamere Capital.
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