From the beginning of the corporate housing industry there have been two primary consumers of corporate housing, relocating executives and business consultants. But over the past decades, corporate housing has evolved into a major segment of temporary housing.
Alternative travel accommodations are becoming the new normal. In fact, recent Corporate Housing Providers Association reports show that the alternative options increased almost 11% in the last year alone and that revenues in this market are estimated to reach over $36 billion by the end of 2018.
Corporate housing is particularly useful for relocating employees, especially corporate executives. In fact, the Corporate Housing Providers Association reports that relocation is the reason for the extended stay 40% of the time.
Outside of relocating executives, other sectors like healthcare, such as travel nurses and medical researchers, and Government and military, such as reassigned service members use corporate housing. Homeowners temporarily displaced by a fire or other disaster may also use corporate housing with insurance companies shouldering the cost of putting claimants up while their homes are being repaired.
Average stays in corporate housing are two to three months and some housing providers may set minimum stays in the range of 14 days or 30 days. CHPA the average tenant stays 86 days and on corporate housing by owner 65% of tenants stayed longer than 90 days with 12% staying a year or longer in their furnished rental.
Corporate housing often is located in apartments or condominiums and detached, single-family homes may also be available, depending on the local market. Corporate housing can conveniently be fully furnished, allowing tenants to live more like they would in a real home. Tenants who use corporate housing have the convenience of moving in with some personal belongings and finding their living both comfortable and conducive to all their needs. The average rate for US corporate housing in 2016 was $150 a day.
With rents being at record heights some Facebook engineers reportedly asked Mark Zuckerberg for help paying rent, and some Twitter employees earning six figures feel like they're barely scraping by, and even some qualify as low-income and receive subsidies. And companies like Alphabet, Google's parent company, is paying approximately $30 million to provide temporary, prefab housing for 300 of its employees.
With growth of corporate housing and allowing secure and happy employees being more productive, innovations will continue to allow this sector to grow and evolve.
Sturai Yusufi works at CBI commercial. The views expressed in this column are the author's own and not that of ALM's Real Estate Media.
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