Pop-Up Hotelier WhyHotel Expands To West Coast, Looks To Develop Multifamily-Hotel Hybrid
WhyHotel, which operates pop-up hotels — temporary hotels within multifamily buildings during their lease-up phase — is taking its concept from its Washington, D.C., home base to the West Coast, opening an office in San Francisco.
The company's new office, which it is calling Hospitality Living, also represents a new strategy for WhyHotel. The office will focus on developing high-rise buildings that offer a flexible combination of multifamily and hospitality units on a permanent basis, and not merely until apartments are fully leased. The company plans to deliver its first Hospitality Living assets in 2022.
"This is the beginning of an asset class between multifamily and hotel — physical buildings that resemble multifamily, but which are designed, entitled and constructed for short-term space," WhyHotel CEO Jason Fudin said. "We've already seen that in commercial office space. It's the natural evolution of multifamily and hospitality."
The company will continue to develop the kind of pop-up hotels it has done in metro Washington, D.C. Fudin noted WhyHotel will always do a pop-up hotel first in any market where it is considering a Hospitality Living development.
"We won't build in a city where we haven't done a pop-up," he said.
Multifamily developers in Washington have taken notice of WhyHotel, Fudin said.
"At this point, you’d be hard-pressed to find a metro D.C. developer unfamiliar with our concept," he said. "If they have a project of 200-plus units, they take a look."
He expects the pop-up model to apply elsewhere as well.
"The inefficiency of new high-rise buildings exists everywhere," Fudin said.
WhyHotel has three pop-up hotels, with locations in Washington, D.C., Arlington, Virginia, and Baltimore. Fudin said the company will be announcing a number of deals outside of the D.C. market in the next month or so.
Investors are keen to see WhyHotel's concept expand. Late last year, WhyHotel closed a $10M Series A funding round led by Highland Capital Partners.
As for the multifamily-hotel hybrids that WhyHotel is planning, Fudin said they would be in core urban locations. He didn't specify locations, though they will probably be on both coasts.
"The majority of core urban hotel markets are along the coasts, from Florida up to Boston and from LA through Seattle," Fudin said. "To us, it made sense to have offices on both coasts.
"We think the most natural rollout of these flex buildings is in places that today have pretty strong neighborhood walkability components."
Fudin said WhyHotel is putting together a team that can develop and operate the assets between traditional multifamily and hotels. The company tapped Will Hu, who recently became WhyHotels senior vice president of acquisitions and development, to lead the new office.
Hu previously worked for Prado Group, a San Francisco-based developer, and has been responsible for over $1B of multifamily, hotel, retail and office investment and development.
Jon Banister contributed reporting.