US: Jack DeBoer, the founder of the Residence Inn, Summerfield Suites, and Candlewood brands, has launched WaterWalk, his latest project.
WaterWalk is described as "a game-changing real estate
investment opportunity that combines extended-stay hotels with
apartment ownership, borrowing the best economics and customer
service features from both."
It combines apartments and hotel services into a gated, purpose-built community with a two-building, 116,000-square-foot, $11.5 million (plus land) development opportunity "that makes sense for guests and investors alike", according to the company.
Guests can choose fully-furnished one-, two-, and three-bedroom accommodations through the Gold Package that offers hotel-like amenities and services. Gold Package tenants enjoy gym membership, 24/7 shuttle and concierge services, free in-room breakfast, housekeeping, DirecTV with premium channels, internet, on-site storage, and convenient, no-cost parking-all at a nightly rate claimed to be around 35 per cent less than a comparable one-bedroom upscale extended-stay hotel.
The same property also offers a Silver Package of one-, two-, and three-bedroom unfurnished apartments to residents based on leases as short as six months. Silver Package tenants do not face security deposits or application fees, and the all-inclusive rent includes the cost of utilities, internet, telephone, waste removal, all kitchen appliances, a 186-channel premium DirectTV package, and in-apartment washers and dryers.
"At its heart, we have reverse engineered both the extended-stay hotel and apartment industries, taking the best from each, while eliminating their respective limitations, inflexibilities, and inconveniences," said 83-year old DeBoer, who is chairman and CEO, of WaterWalk.
"Apartments are still being built and managed the same way they were more than 50 years ago, without any recognition of today's mobile workforce and changing consumer lifestyles. Tenants are typically forced to sign one-year leases. At the same time, prospective tenants have to make appointments to tour a rental during limited hours, put down hefty security deposits, and are even charged a fee simply to apply. Then, they have to make their own arrangements for cable, internet and every utility, and pay for them separately. None of that is consumer friendly, so we did away with it all."
"Corporate lodging is based on renting inventory throughout a given market, making it nearly impossible to deliver high-quality service to guests who are not centrally located," added DeBoer.
The company says: "Commanding the higher revenues of an upscale extended-stay hotel and the reduced operating expenses of an apartment building, WaterWalk offers attractive economics, as well as the zoning flexibility, financing leverage, and resell advantages of multi-family properties. Apartments continue to be attractive acquisition targets for REITS and other investors. Each WaterWalk property can be fine-tuned between fully-furnished and unfurnished apartments, according to local market conditions."
WaterWalk franchisees also benefit from a range of services designed to improve the marketing and operations of the property. A national sales programme targets corporate human resource departments to build a network of extended-stay contracts, and WaterWalk's proprietary CRM software helps franchisees to solicit renters through online apartment rental sites, streamlines the application process, and tracks tenant from initial interest to first month's automated clearing house (ACH) payment.
Because of their design, WaterWalk apartments are zoned for commercial use, allowing stays for less than 30 nights in most markets.
"The option for short stays is a fundamental difference that sets the brand apart in both the residential and corporate apartment sectors," said Mark Skinner of the Highland Group. "For example, most corporate apartments in the U.S. require a minimum stay of 30 nights or more. So anyone on a business trip for less than a month cannot go into a typical corporate apartment. They are limited to either a regular or extended-stay hotel."
In the first month of operations at WaterWalk's first property, in Wichita, all the apartments in the first building were occupied without any form of discounting. The second building opens on November 1 and 15 units are already pre-leased or reserved. Investors have claimed further franchises and sites in St. Louis, Charlotte, Indianapolis, Houston, Atlanta, and Louisville, among other cities.