Real estate is valued globally at around $228 trillion, a figure which exceeds the global value of equities and securitized debt by a full $79 trillion. In 2017, US residential real estate alone was worth $31.8 trillion.
We are also becoming a renter nation, and this trend will keep growing into 2022. Housing prices have become so inflated that the percentage of people who can afford a home has already dropped off and will continue to do so. Much like with the last housing crisis, rental properties will meet the demand for housing.
Despite real estate being – by far – the largest asset class in the world, it seems impossible to understand why so many people can’t afford rent when so much of the global wealth is in real estate. Between 40% to 50% of residents in major cities have become rent-burdened spending more than over 30% of their pre-tax household income on rent.
THE OPPORTUNITY IS MASSIVE
Rent is, on average, the largest expense Americans face. Zillow estimates that renters in the US shell out more than $485 billion a year.
93% of all new multifamily buildings in this country are developed as pure rentals, according to Harvard, with New York being the nation’s largest apartment market with 2.2 million rental units. According to Pete Flint from NfX, this rental market represents a huge opportunity for tech and design disruption, there’s an increasing mismatch between supply (the typical multifamily building), and demand (rapidly evolving tenant preferences).
The home stay market is $100B, growing 30% per year, and the hospitality industry is $1T. This kind of size and speed means multiple big opportunities will shake out. Millennial consumers are no longer interested in ownership, which becomes a burden, they are more interested in access and convenience. The sharing economy has already normalized on-demand and subscription-based living for this demographic, but the options available for leasing a property remain inflexible and old-fashioned, with most products being the traditional apartment configuration for multiple residents that most multi-family properties offer.
In this rapidly evolving world, what we expect and need from our homes has never been greater. Beyond the unit itself, we expect an experience which can support our lifestyle. We want safety, technology, comfortable places to work from home, lease term flexibility and a community in which we feel connected.
That is why we created Maison, a housing brand which is a one-stop-shop solution for building owners to increase revenue, while also delivering a beautiful housing product at competitive rents for tenants. Our model combines the predictable cash flow of the traditional multifamily building with the flexibility of shorter term, fully furnished units that increase NOI, and thus value of assets.
There is much interest in this space, but as we know, Real Estate developers and building owners are a very risk averse group. Maison becomes a turn-key solution for transforming any multifamily property asset into a flex-multifamily cash-flowing property. Our R.E. team, along with our proprietary NOI optimizer software can quickly analyze any existing building and quickly underwrite how it would perform as a Flex-MF property. Our award winning design team can advise as early as the conceptualization and pre-development stage in terms of how to adapt floor plans to maximize number of keys or by simply adapting one of our predefined design packages to an existing building. Lastly, our operating partners, highly experienced in the furnished and flexible lease space, will guarantee that the property is run smoothly and to the proper standards.
With cap rates at a historical low and construction costs at record highs, we offer Real Estate investors an opportunity to easily get into an alternative asset class that makes investing in existing buildings pencil out.
Brian Chesky recently announced that he would be living in Airbnb’s, following what he believes will be one of 2022’s biggest trends, people spreading out to thousands of towns and cities, staying for weeks, months or even seasons at a time. I put my stuff in storage and lived in every possible living arrangement for three years in order to better understand the way people live in cities, my cofounder was also a nomad for a couple of years, that’s why we’re extremely bullish on this future of housing.
The way we live has been radically transformed in the last few years, society has evolved and our lifestyles have shifted, housing has been lagging in these transformations, we’re here to update it, welcome to housing3.