If you can’t beat ’em: Barry Sternlicht invests in Airbnb-like short-term rental company

Company depends on developers setting aside units

New York /
Feb.February 20, 2018 10:00 AM

Barry Sternlicht and an apartment in Austin, Texas that will be among those listed on Lyric

A venture capital group, including hotelier Barry Sternlicht, invested in a San Francisco-based company that works with developers who set aside blocks of apartments for short-term rentals.

The group, which also included Fifth Wall Ventures and New Enterprise Associates, made a $15.5 million Series A equity investment in AJJK Inc., the Wall Street Journal reported. The company, which is soon to be renamed Lyric, is seeking to create an upscale short-term rental brand akin to a four- or five-star hotel within a multifamily building.

The idea is that developers will set aside swaths of apartments in their projects for short-term rentals. Airbnb launched a similar program in 2016, “Friendly Buildings Program,” which allows developers to list their rental units on the website. Airbnb claims it has 13,000 units listed. Lyric is setting out to be more of an amenity offered in a luxury rental, a place where guests of residents can stay or where millennial travelers can feel like they are part of the neighborhood.

“If somebody creates a successful business model, plenty [of multifamily landlords] will adopt it,” Conor Wagner, an analyst with real estate research firm Green Street Advisors.

Still, many hurdles lie ahead. In New York City, for example, short-term rentals of fewer than 30 days are illegal in buildings with three or more units, unless the owner is present. The hotel industry is also a fierce opponent to services like Airbnb.

Lyric is aiming to have 1,000 units by the end of this year. [WSJ] — Kathryn Brenzel


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
Eric Gordon
Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Big Tech locations in NYC
MAP: Here’s a look at all the Big Tech locations in NYC
MAP: Here’s a look at all the Big Tech locations in NYC
CHIP executive director Jay Martin (LinkedIn, iStock / Photo illustration by Priyanka Modi)
Landlords called it: Vacancy rate jumps, rent-stabilization stays
Landlords called it: Vacancy rate jumps, rent-stabilization stays
331 Elmora Avenue and 103 Ryan Street (Kislak Realty)
Tri-state deal roundup: Multifamily, industrial still hot
Tri-state deal roundup: Multifamily, industrial still hot
From left: Vice Media CEO Nancy Dubuc, Rudin’s CEO and co-chairman Bill Rudin, and Dock 72 (Getty Images, S9 Architecture, Rudin Management, iStock)
Vice scraps move to Rudin’s Dock 72
Vice scraps move to Rudin’s Dock 72
From left: Metro Loft Management founder Nathan Berman, Silverstein Properties chairman Larry Silverstein, and 55 Broad Street (Metro Loft, Silverstein Properties, LoopNet)
Silverstein, Metro Loft pick up Rudin’s 55 Broad Street for $180M
Silverstein, Metro Loft pick up Rudin’s 55 Broad Street for $180M
1552-1560 Broadway and Wharton Properties’ Jeff Sutton (Google Maps)
Investor claims Jeff Sutton cheated him out of millions on Times Square deal
Investor claims Jeff Sutton cheated him out of millions on Times Square deal
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...