Fueled By Seller's Market, Corporate Housing Providers Unveil NYC Plans

The New York City corporate housing market has flourished in light of the extreme local hotel seller's market, and providers BridgeStreet Worldwide, Furnished Quarters and Oakwood each recently announced plans to develop new properties in the area.

Though the only types of hotels with which corporate housing providers typically compete are extended stay properties, the increasing number of business travelers to New York offers a strong base of potential corporate housing business.

BridgeStreet in May announced that it will exclusively manage a high-rise property its parent company, Sorrento Structuring, is developing. The site is located on 34th St., in the Murray Hill area of Manhattan. The building will be 35 stories, with 110 high-end corporate suites.

"Our plans for this location are to build our first 'easy-to-stay-with' building," said Lee Curtis, president and CEO of Herndon, Va.-based BridgeStreet Worldwide. "This building, called S34, will offer our customers a fresh approach to business travel accommodations by combining the privacy and comfort of a luxury residential building with the impeccable services and amenities you would expect to find at a fine hotel. The full roster of premium amenities and services include Wi-Fi throughout the building, a concierge and doorman-attended lobby, a state-of-the-art fitness center, a rooftop terrace and spaciously designed residences."

New York City-based Furnished Quarters in June announced an exclusive deal with Jersey City's newest luxury apartment complex, Grove Pointe. The building will include a 10,000-sq.-ft. fitness center, an outdoor swimming pool, 24-hour doorman/concierge service, screening theater, a guest lounge with flat-screen televisions and Wi-Fi access, according to a press release.

"The others all looked the same and felt like hotels. We wanted the New York City experience, where the units in the Upper East Side are different than the ones downtown," said Furnished Quarters chairman Steve Brown.

Furnished Quarters offers a variety of sizes in their housing, from studios to three bedrooms, and in luxury buildings on down. Brown also pointed out that Furnished Quarters is the only corporate housing provider in New York City to offer service and maintenance 24 hours a day.

Oakwood in June also announced plans to open five-star apartment residences in the Oakwood Rockefeller Center, said Gavan James, senior vice president and general manager of Los Angeles-based Oakwood Worldwide. The 34-story building will offer high-rise studios as well as one- and two-bedroom apartments.

BridgeStreet's Curtis said more areas of Manhattan are becoming popular for corporate housing. "Whether it is Tribeca or Downtown, these areas are also becoming popular for living as well as working," he said. Oakwood's James said areas outside the city, such as Connecticut, Long Island and Westchester County, N.Y., are becoming options for corporate housing as well.

Hotel Demand Impact

Hospitality consultant John Fox, senior vice president and executive in charge of PKF Consulting's New York office, said there is some correlation between the rising cost of hotels and the success of these forms of corporate housing. "There are so many periods during the year—we think it could be as much as 225 nights a year—Manhattan is essentially sold out," he said.

Sean Hennessey, CEO of New York-based hospitality consulting firm Lodging Investment Advisors, agreed, noting that corporate housing is one of the options travelers have begun to consider because of the hotel market.

The corporate housing suppliers were hesitant to say how the rising costs in New York City hotels affect them. "While we are considered a segment of the hospitality business, we do not typically look to the hotel industry management trends as it relates our business model," BridgeStreet's Curtis said.

Both corporate housing providers and hoteliers share the problem of limited space. "There's only so much land in New York," Hennessey said. That's why many corporate travelers are staying in areas outside of the city, such as New Jersey and Connecticut, he said.

Both Fox and Hennessey said that the plans to create approximately 10,000 more rooms in New York City will help in alleviating the problem.

Despite the increase in supply, Hennessey said corporate housing still will be successful. Although there has been a recent surge in demand for corporate housing, "There is always going to be some level of demand for those types of accommodation," according to Hennessey.

BridgeStreet's Curtis sees the future as promising. "The great thing about New York City is that it is a dynamic world market, and that will always drive residential and commercial investment and development," he said. "We are seeing a great deal of new residential housing development that is bringing the level of quality up significantly from years past."