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Corporate housing supplier Furnished Quarters in the past year rapidly expanded its footprint in the Northeast, increasing its portfolio of apartments outside New York City between July 2013 and July 2014 by nearly 40 percent. Furnished Quarters owner and president Gary Brown recently spoke with senior editor Michael B. Baker about where the company is planning growth, including a new extended-stay apartment-style hotel that is under development, as well as the company's strategy for booking and payments.
Is demand keeping up with unit growth?
We're growing like crazy right now. Our unit count will be up by about a third over the prior year. Massachusetts is growing tremendously. We've sold out the summer, so we're unfortunately turning people away. In White Plains, we've grown quickly in a short period of time, and we've sold out for the summer as well. In Manhattan right now, you can get some offerings, but you won't get a lot of choice right now for the summer. We continue to grow inventory, adding buildings in each quarter. We have about 30 properties now in Manhattan, so we have apartments for all types of guests, from interns to CEOs.
What specific types of growth are you pursuing?
We are catering to the higher end of the market. A CEO or an actor comes in, a lot of times they want a unit nicer than what even Furnished Quarters offers. So, we have clients now paying $20,000 to $40,000 a month for a high-end apartment. We're custom-building the apartments. They tell us what they want and where they want it, and as long as they're willing to commit for three months, we'll build it for them.In addition to that, we are just about to announce the start of a global solutions center, where it's a one-stop shop. So, if you have a corporate client with needs outside of our core market, we'll have a solutions center dedicated solely to sourcing the right apartment. Many are Go partners. We own a piece of [Go Furnished Housing Providers] along with about 14 to 15 other corporate housing companies across the country. We each have an equity stake in that entity, with a sales and marketing company for larger accounts, and that feeds into our network. We have relationships in London, Sydney and around the world.
What about your foray into the extended-stay hotel market?
The most exciting thing we have coming is 70 Pine. It's going to be coming online in the first quarter of next year, and it's a partnership with Rose Associates and DTH Capital. They're the owners and we manage it. It's a traditional apartment building, and the hotel units—the bottom four floors, with 132 units—are regular apartments, and you can do a less-than-30-days stay. There are very few buildings in Manhattan that are traditional apartments zoned for hotels.
Do you project unit growth will sustain during the next several years?
We always want to be somewhat conservative. I would expect our growth in the next five years to be at least 10 percent a year in our core markets. We have more than 1,000 units now across the globe. As we grow, we can put some more of our own resources toward that.
Are you pushing for more online bookings?
No real changes in the booking side. It's such a consultative business that you can't do it justice by booking online. It's not like we have a 300-unit hotel and we block dates or don't block dates. Often, in corporate housing, one of our guests will come in and want that exact corner apartment in this building. Well, maybe that apartment's not available Aug. 1 but is on Aug. 13, so we can put them in something else prior. You need to have that discussion, that interview.
What other corporate travel demands have you been addressing?
One thing we're taking the lead on is how you pay for things. Traditionally, you swipe a credit card or write a check. Our clients are paying by credit card, wire transfer or check. The concern is the security of that client's credit card information when filling out a form and faxing or [emailing a] PDF to one of our offices. The concern is what happens to that information. We've solved it with an online solution through a company called PayLease. It's a simple login: You go into a secure login, get a user name and password and it's level-one security, same as on all the major websites today.
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