In London ’ s Canary Wharf , one of the world ’ s most sought-after office and retail spaces , build-to-rent Vertus apartments provide core amenities , including a selfservice bar , private dining room , screening room , health club , as well as a gym and spa for a resident lifestyle that epitomizes comfort and convenience . In Google ’ s California headquarters , employees enjoy office wellness from quiet immersive spaces for mediation and inspiration . And Future X Smart Stores in Japan , China and Singapore provide consumers a self-service experience for luxury skin products that also features a contactless skin analysis machine .
Real estate owners who are successfully embracing this trend are maximizing the use of their spaces and income potential , as every part of the physical real estate serves a purpose that generates revenue or allows the owner to charge a rent premium . As an example , Whole Foods-anchored multi-housing properties across high growth markets in the U . S . commanded a rent premium of nearly 6 % in 2021 over comparable product in the market lacking a Whole Foods .
“ HOTELIZATION ” OF REAL ESTATE The success of operational real estate , which has accelerated with increasingly blurred lines between real estate sectors , has led to the alternative accommodation sector ’ s rapid growth .
The recent popularity in alternative accommodations is due to the changing needs of today ’ s traveler . Alternative accommodations tend to provide a functional lodging space , where the traveler can easily workout , rest , eat and work with the upmost privacy . Moreover , because of the tech-forward features many alternative accommodation platforms boast , this lodging product seemingly provides an additional layer of safety and convenience during the current environment given the limited human interaction necessary to check-in / check-out . As such , investment in the sector has hastened over the past year , with market cap ballooning to US $ 8.2 billion globally in 2021 .
Across Asia Pacific and Europe , Middle East and Africa , the co-living sector is observing notable growth and is emerging as a popular alternative accommodation type . This use of space is prevalent across many vibrant urban cities , where younger , cash-strapped travelers can enjoy lodging that features a place to eat , sleep , work and socialize for as long as one day , a month or longer .
In the Americas region , alternative accommodation disruptors such as Sonder , Blueground and WhyHotel are rapidly emerging with innovative digitalization and specialized stays for business or group travelers . In fact , in New York City , Silverstein Properties acquired its first residential building in New York for US $ 247.5 million with Sonder as one of the major lessees in December 2021 . Sonder is framed for its tech-enabled guest experience and continues to expand its footprint in the Americas with recent openings in Montreal and Toronto .
Overall , the alternative accommodation segment provides an attractive opportunity for portfolio diversification and revenue maximization , which has made the segment attractive to investors . We expect the segment to continue growing in tandem with what many are coining as the “ Diamond Age of Travel .”
A bedroom at a Sonder property
54 hotelsmag . com March / April 2022