Corporate Housing 101

New York Times Article - Not Home, but Not a Hotel

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Published Date: 2009-04-07

Those upscale apartments, in better economic times, would have sold quickly at high prices. But now, instead of trying to sell them at a fraction of what they were worth a few years ago — if they could be sold — the owners are buying time and making some money through the corporate rentals. “Landlords right now are in a troublesome situation with everyone pinching pennies,” said Wesley Zlotoff, chief executive of RentalSpaceNetwork.com in Scottsdale, Ariz. “They can’t sell their property because no one’s buying, so this way they can get as much for it as possible.” The properties are often less expensive than the old options as well, making them especially attractive as companies look for ways to cut travel costs. “If it’s done right, it can be a win-win for everybody,” said John Challenger, chief executive of Challenger, Gray & Christmas, a recruiting and outplacement firm in Chicago. “The landlord can make space usable, the employee is happy to have a place that’s more private and have some of his or her things there, and the company saves money.” At the same time, some lodging chains, notably Hilton, Marriott and InterContinental, have expanded their lines of extended-stay hotels, which feature kitchens and rent by the week or month. The number of extended-stay rooms rose 9.2 percent in the first 11 months of 2008, compared with 2.6 percent growth for all hotel rooms, according to the research firm STR Global. Demand for extended-stay rooms increased by 3.5 percent in that period, while the broad industry experienced a 1.5 percent decline. Extended-stay hotels and corporate housing sites appear to be thriving because so much else in the economy is not. The main customers for the apartment rental Web sites are property owners who pay a listing fee. Some have cultivated relationships with employers. CorporateHousingByOwner.com, based in Highlands Ranch, Colo., has about 2,000 registered companies, said Kimberly Smith, its chief executive. The site helps line up apartments for companies moving large numbers of employees, as often happens in industries like defense and energy, Ms. Smith said. The companies pay no fee for the assistance or to register. The site benefits from the demand for properties created by their presence. To lure a corporate clientele, most units are furnished and wired for technology — cable or satellite television, high-speed Internet access, telephone — and stocked with cutlery, dishes, kitchen appliances and linen. Even with these items, renters often find the apartments cheaper than alternatives like hotel rooms or apartments. Visit the NYT website to read the full article. A version of this article appeared in print on April 7, 2009, on page B6 of the New York edition.