Airbnb Is Getting a $200 Million Boost to Build Its Hotel-Like Apartment Business
Skift Take
Airbnb is getting into the very business it has spent the past decade disrupting. Will Niido Powered by Airbnb usher in an era of co-living residences that encourage homesharing?
If you can't beat 'em, join 'em, as the old saying goes. That seems to be ringing true for some multifamily housing developers, who are just now beginning to explore the opportunities of building "Airbnb-friendly" apartments.
Today, you can count Brookfield Property Partners and Silverpeak Real Estate Partners as two of those landlords who see dollar signs in working with homesharing giant Airbnb.
Brookfield Property Partners announced it has entered into a $200 million equity investment program with Niido, a new hotel-like concept that Airbnb announced in October, and Silverpeak Real Estate has committed $20 million to the venture. Niido is being run by Miami-based Newgard Development Group and the $220 million being invested is going to Niido, not to Airbnb.
Their investments signal a shift in how landlords and developers are beginning to view Airbnb at a time when their peers are still fighting the company. Apartment Investment & Management Co. (AIMCO) is currently suing Airbnb to stop its tenants from illegally renting out their units on Airbnb.
Brookfield, in particular, is a major global commercial real estate player. Brookfield Property Partners has approximately $68 billion in total assets, while its parent company, Brookfield Asset Management, has more than $265 billion in assets under management. Its investment in Niido shows the company's willingness to embrace homesharing, rather than fight it.
A Win-Win?
So why would landlords want to partner with Airbnb?
In short: because it can make them money. When Airbnb launched its Friendly Buildings Program in September 2016, the company sought to deliver a lucrative value proposition to multifamily housing providers: If you let your tenants rent out their apartments on Airbnb, we'll make sure you get a cut of those profits, too.
Since the program's launch, Airbnb said it had accumulated more than 10,000 listings globally within the program as of August 2017.
A survey conducted by homesharing platform Pillow, which has partnered with Airbnb to provide property management services for the Airbnb Friendly Buildings program, said that of all the nights booked on Airbnb in 2016, 65 percent were for apartment or condominium buildings. And a
