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Investors bet on flex living model, despite workers returning to the office

Real estate investors don’t just believe that remote work will remain long after the COVID-19 pandemic subsides—they’re betting on int. These investors are backing real estate startups that are creating flexible ways to rent apartments, The Wall Street Journal reports. The thinking is that remote working trends will lead to demand for new forms of housing.

For example, Sonder Corp. and Mint House are startups that were created prior to the COVID-19 pandemic. They provide short-term, furnished apartments that can be reserved similarly to hotel rooms on the Internet. These companies got a boost during the pandemic because young professionals left their downtown residences while the pandemic was at its worst.

Meanwhile, Sentral, formerly known as Daydream Apartments, which has backing from an investment group that includes Highgate Hotels LP, Bozzuto Group and Iconiq Capital, is upgrading its services in order to grab more market share. The company currently manages a network of 3,000 apartments across seven U.S. markets including Los Angeles, Austin, TX and Seattle, The Wall Street Journal reports. Sentral will provide technology that lets tenants book stays for as long as they need, from one night to years.

Sentral has 10 apartment complexes, which have furnished and unfurnished units for flexible stay lengths. Long-term tenants can knock their rent down 25% or more if they use the company’s tech to rent their apartment. The company and its investors are confident the flexible living trend is what customers will want and the demand will continue as businesses request workers come back to the office.

“There’s a huge market of mobile professionals that we’re seeing that travel and work in a different way,” Jon Slavet, the firm’s chief executive told The Wall Street Journal.

San Francisco-based investment firm Iconiq Capital owns all of Sentral’s properties. The firm has $67 billion in assets under management, including $6.2 billion in data centers, “tech-enabled multi-family housing” and other real estate, per the company website. Facebook Chief Executive Mark Zuckerberg and LinkedIn co-founder Reid Hoffman are among Iconiq’s investors. Iconiq has invested $500 million in to Sentral itself and it buildings the company manages. Sentral will look to add thousands of apartments through new building acquisitions or buildings that other landlords currently own within the next five years.

“We’re combining the best of home and the best of a hotel,” Slavet said told The Wall Street Journal.

Benefits of flexible living

Part of the appeal of working in a flexible office is the lack of a long-term lease. Renting a flexible living space grants tenants a similar freedom. Companies like Sentral can also offer young professionals the amenities that they want, according to Jeff Felder, managing director and head of real-estate investments at Iconiq.

“Not everyone likes to buy furniture and move every 12 months,” Felder told The Wall Street Journal. “These are really compelling ways to live and liberate your own lifestyle.”

Some analysts are questioning how long flexible living spaces can thrive post-work-from-home era, given that the model can be expensive to manage. The downside of short-term leases for many landlords is the potential turnover and higher costs.

“I am skeptical about short-term, flexible lease options gaining meaningful momentum once employees are required to get back to the office at least one day a week,” John Pawlowski, senior analyst at real-estate research firm Green Street told The Wall Street Journal.

Bill Smith, Chief Executive and Founder of Landing, a flexible housing company, remains confident in the model’s long-term potential.

“COVID-19 (accelerated) this trend that was already in the works, where consumers want more flexibility in their lives, and ease and convenience,” he told The Wall Street Journal. “We’re really not expecting any slowdown.”

Joe Dyton can be reached at

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