What do a rooftop pool, valet parking and room service have in common? All customary hotel amenities, they are also a part of daily life for residents of the Latitude Med Center Apartments.
"The line between a boutique hotel and an upscale apartment building continues to blur as apartment amenities become more and more incredible," said former hotelier Nitesh Gandhi. That’s part of the reason he left the hotel business to found Locale, an example of what has become known as the aparthotel industry.
Aparthotels enter long-term leases with apartment buildings, furnish the units with stylish furniture and rent to business travelers and Airbnb vacationers. They aim to provide all the luxuries you would expect from a hotel as well as the conveniences — a full kitchen, a washer and dryer — of a home.
SHORT-TERM RENTALS: Airbnb and others target unmet needs of Medical Center patients
Locale’s portfolio includes roughly 30 units in the Latitude Med Center Apartments. The Austin-based company employs five people on its Houston team, and has plans to expand. On Tuesday, the company announced it had raised $2.5 million in seed round funding, which it will use in part to expand its Houston listings to 65 or 70 units from 50 units in the coming months.
The units are located in the Texas Medical Center, where the main clients are patient families, and the Galleria, which caters more to business people and leisure travelers. Locale also hopes to secure more units downtown.
The Texas Medical Center and downtown are also drawing other aparthotel companies, such as Vacasa, which began partnering with real estate developers and property managers to provide short-term housing in November.
At that time, Joshua Viner, senior manager of Vacasa Multifamily, told the Chronicle the industry had seen an increase in guest demand for urban short-term rentals. "We’ve had property management companies reach out to us interested in improving the vacancy rates in their portfolios."
Gandhi described the model as a "win-win" for developers who improve their vacancy rates and customers who receive hotel-level services.