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Hospitality Startup Sonder Opening 3 New D.C. Locations

The lobby of The Quincy, a building owned by Urban Investment Partners and operated by short-term rental startup Sonder.

Vacation rental company Sonder is expanding in Washington, D.C., adding 280 units across a trio of locations to its portfolio.

San Francisco-based Sonder, which manages whole properties or blocks of apartments and offers them as short-term rentals via its online platform, will operate Varsity Investment Group's Georgetown C&O at 1111 30th St. NW, Urban Investment Partners' The Quincy at 1823 L St. NW and Europa in Barracks Row, a 49-unit property completed last year at 818 Potomac Ave. SE.

"Sonder’s digitally enabled experience, paired with their thoughtful approach to design and consistently high-quality spaces, truly differentiates this property as a great homebase for visitors to the D.C. area," Steve Schwat, founding principal at Urban Investment Partners, said in a press release.

All of Sonder's new buildings will feature in-unit kitchens or kitchenettes and en-suite laundry. The Europa building is adjacent to another Sonder-run property, the Callisto. That project, developed by MMG Development, was slated to deliver in Q1 of last year, according to the developer's website.

Sonder also operates two locations in Del Ray and Alexandria.

Sonder agreed to go public via a merger with SPAC Gores Metropoulos II in May with a $2.2B valuation, fueled in part by reassurances that its short-term rental model wasn't as deeply impacted by the pandemic as traditional hotels. The merger is expected to be approved this week, although with a $1.9B valuation after a November downgrade.

The vacation rental scene in D.C. has changed dramatically since the pandemic began. Data from short-term rental tracker AirDNA shows the number of active rentals in the Washington, D.C., market fell consistently throughout 2021, from 7,162 in Q1 to 6,210 in Q4.

The city said it will begin enforcing rules surrounding Airbnb owners in April after the council first passed a law regulating the platform in 2018. 

Starting Jan. 10, the D.C. Department of Consumer and Regulatory Affairs began accepting license applications for short-term rentals. Any homeowner leasing all or part of their primary residence (they can't lease a second home) is now required to get a license. 

Pop-up hotel startup WhyHotel also had to lay off much of its staff when the pandemic shut down travel. But the D.C.-based operator has since rebounded, signing a string of new deals last summer to operate in locations like Union Market and Southwest D.C.

Sonder is looking to expand in D.C. and other markets around the world as corporate and vacation travel rebounds. This month, the startup announced it had its strongest New Year's revenue yet, and noted it grew its corporate travel business with 100 new accounts last year.

In a presentation to investors last year, Sonder co-founder and CEO Francis Davidson said he wanted the company to become "the Amazon of Hospitality," the Commercial Observer first reported, and planned to reach $4B in revenue by 2025.