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Corporate Housing Shop on the Hunt for Apartments

Reside Worldwide Looking to Own, Not Just Manage with Launch of Reside Realty Group
May 11, 2018

Reside Worldwide, one of the big managers of corporate housing in the U.S., is set to become a big owner of rental properties.

Terry Strongin, executive vice president of Reside Realty Group.

The Seattle-based company has hired former Equity 24, LLC managing member Terry Strongin to raise capital and acquire 20 to 30 multifamily properties in the next three to five years. The new affiliate, Reside Realty Group, will target big gateway cities like Seattle, San Francisco, Washington, D.C. and Boston, with a focus on properties offering between 50 and 200 units.

The company will convert the apartments into fully-furnished homes, and staff the properties with the go-to amenities of corporate housing: 24-hour concierge, room service, transportation and other advisory services.

Reside, backed by Westbridge Capital, isn’t disclosing a fund target for the acquisitions, but given the high per-unit price of apartments in gateway cities, the company will likely be looking to acquire close to $500 million in apartments to meet its goal, and will need around $200 million in equity backing.

If successful, Reside will become one of the top owners of corporate housing in the U.S.

It’s a new niche in the multifamily market: highly-serviced, nearly hotel-like amenities and properties catering mainly to corporate clients assigned to a new city for an extended - but temporary - period of time.

The business model can offer investors higher yields than traditional rental assets. In gateway cities, 4- and 5-Star rental properties are throwing off 4 and 5 percent yields. Corporate housing can offer yields closer to 7 percent or more.

Many of the nation’s big corporate relocation and extended stay properties simply lease blocks of apartments in existing properties operating as traditional rentals. A few own their own properties. Oakwood Homes, of Los Angeles, is the largest, with 50 properties and more than 200,000 units available.

John Doherty, Multifamily Reporter  CoStar Group   

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