Author: Matt Singley, Founder & CEO of Corporate Housing Instant Sourcing & Booking Platform - ReloShare, Co-Founder of Corporate Housing Provider - Pinnacle Furnished Suites, Recipient of the Corporate Housing Providers Association “Company of the Year” Award
In my never-ending quest to offer my unsolicited and optimistic opinions regarding corporate housing to my network, I feel it's necessary to offer a vision of a possible future. This is a 3 month follow up on 2021 Predictions from a Corporate Housing Founder & Tech CEO.
2021 will not be remembered as a depressed and painful year but as one that started slow and progressed to absolute operational insanity. I offer this projection in the most bullish of contexts.
Let me tell you why...
The Disclaimers:
- The following is an analysis for master lease style companies. AKA core inventory holders.
- Note that every market is different, with California likely being even more challenging to predict given state/local COVID lockdowns, the remarkably persistent tech exodus, etc. The majority of my referenceable data at this point is Chicago/Nashville driven, but I see common themes emerge nationally, as well. Much of this is anecdotal and speculative based on 100s of conversations.
My Reasoning:
- The extreme corporate demand dropoff in 2020 caused most corporate housing companies to reduce inventory as fast as possible to cover their risk/expense obligations. Most of our core teams got smaller as a natural result.
- We're not in a position to rapidly expand during the busier season as we typically would be. Additionally, we have a much smaller base to ramp from.
- Collectively, we have and will continue to have risk paranoia and resist the urge to scale back up, especially with at-risk leases. We won't take new leases for 30-60 day clients, as we'll feel the need for stronger "anchor leases." Maybe this is a 90-120 day minimum. We've recently been conditioned to question whether we can back-fill.
- Multifamily assets were burned, at scale, by corporate housing. Most of the unpaid rent across the country is corporate. Acquiring new inventory will be harder for many that don't have close/trusting relationships established. Those with outstanding/deferred rent won't be able to expand.
- Supply chains are still in rough shape. Furniture is still hard to come by at scale. We could end up supply chain limited.
- Pent up relo demand will open without warning, leaving us operationally unprepared.
Summary:
The topics discussed above culminate into a perfect storm. I see a world where there isn't enough inventory, and it becomes exponentially harder to acquire it for ourselves and our clients.
This analysis is one of the driving factors pushing us to get ReloShare out there as quickly as possible. By leveraging local partners, we can better utilize our collective inventory, lower our vacancy loss, and utilize each other's operational capacity to scale for our clients. Everybody wins.
Here's to 2021, ya'll. It's going to be wild.
