Quick Q&A: What’s Up with SilverPeak’s Investment in Airbnb’s Niido Communities
Key players from SilverPeak and Niido, talk about their project in Florida.
Silverpeak Real Estate Partners in December invested $20 million in a partnership with Airbnb’s development arm Niido to buy six apartment communities in Florida and develop them into short-term stay-friendly properties. The first – a 324-unit community in Kissimmee, Fla. -- is planned to open in Q2 2019.
Brookfield Property Partners joined the deal, investing $200 million. Residents will be permitted to home-share individual rooms or their entire apartment homes through Airbnb for up to 180 nights per year and share the profits with the owners.
As equity investors, the companies will share in the 25 percent cut of the revenue from each apartment subleased on Airbnb, according to a press release.
Units Magazine recently spoke with Brad Lebovitz, Managing Director, SilverPeak; and Cindy Diffenderfer, Co-Founder and Chief Marketing Officer for Niido; about the project.
What made the Airbnb model of short-term rentals attractive to SilverPeak?
Brad: We were impressed by Niido’s unique business model and the potential to leverage our extensive experience across the multifamily space while simultaneously diversifying our portfolio. The Niido concept blends stability from an established asset class (one that we’re extremely familiar with) with opportunity to unlock additional upside from implementation of the home-sharing concept.
We’ve heard that Niido plans to build its first community in Kissimmee. How is that project progressing? Is there a predicted date when it will open?
Cindy: Yes, we’re really excited about the project in Orlando. We are planning to open early Q2 of 2019. We will announce a formal date in the next couple of weeks.
What other markets (Florida or elsewhere) do you see Niido developing additional Airbnb-type properties?
Cindy: We are looking at deals in major cities across the United States. Specific to Florida, we’re focused on Fort Lauderdale, Miami and Tampa next.
Is there a chance that Silverpeak increases its investment based on performance? How would you measure performance for these Niido properties?
Brad: We entered into the partnership with Brookfield and Niido with the expectation for growth and scale. While the official roll-out of Niido technology is expected next quarter, we anticipate demand for the product upon release. We’ll have access to Airbnb resources and data, which will allow us to compare performance across other Airbnb properties within that specific market, and also leverage data from our own portfolio as an additional resource for measurement.
Do you envision SilverPeak increasing its investment into traditional multifamily properties?
Brad: Multifamily housing has always played a significant role in our investment strategy and one that we expect to continue to focus on in the near future, particularly given the demand for and defensive nature of the asset class.