Shipt founder’s latest venture eases apartment rental anxiety

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When Bill Smith moved to San Francisco in 2016 to work on his grocery delivery startup, the most boring part was finding an apartment.

Examining rental listings in an unfamiliar city, calling the gas company, waiting for an Internet connection – the entrepreneur had little patience for all of this. So after Smith sold his company, Shipt, to Target in 2017 for $ 550 million, he decided to use some of that money to do something to fix the apartment problem.

In June, using $ 15 million of his own money, the 34-year-old launched Landing, a member-based business that offers short-term furnished rentals in some of the country’s most expensive cities. He rents apartments from owners, including Related Cos. and AvalonBay Communities Inc., fills homes with furniture and dishes, connects cable and Internet, and rents them at a premium for as little as 30 days.

“The location needs to change,” Smith said. “The whole point of leasing is having the freedom and flexibility, and like today, you don’t have flexibility because you’re locked into a lease. You have to move all this furniture and do all this work and you just want to focus on your work and your friends and live your life.

More flexibility

Smith’s business joins a growing wave of challenges to traditional rental principles – a movement that questions why renting an apartment requires significant upfront costs and a commitment to stay for a year. Cohabitation units, where tenants share furnished common spaces, are on the increase, as are cheaper alternatives to paying a full month’s rent deposit. There are even apartment buildings where landlords explicitly allow tenants to sublet their homes through Airbnb for half the year.

Shipt founder Bill Smith started his latest business, Landing. (Michael Tomberlin / Alabama NewsCenter)

“You sign a 12-month lease and you get an empty apartment – it’s our forever business model,” said Rick Haughey, vice president of industrial technology at the National Multifamily Housing Council, a homeowners’ advocacy group based. in Washington. “Offering more flexibility than this traditional model is likely to prevail in the future. It is the potential disruptor to our industry. “

Smith signed leases and furnished around 200 apartments in six cities, including San Francisco, New York, Nashville and his hometown of Birmingham. Renters pay Landing an annual membership fee of $ 199, which allows them to sublet any of these apartments for a monthly rental cost of about 10-13% higher than if they were renting accommodation directly from the owner, he said. They can stay indefinitely on a monthly basis.

Landing has around 150 paying members, most of whom have signed leases of six months or more. The move requires three days notice. With a normal lease, the notice to move is usually 30 to 90 days.

Unlike corporate housing, where businesses are the clients, Landing deals with individuals, who might seek the flexibility to relocate for personal reasons and whose jobs may be transferable. Sometimes that move is done in the same city, to a more suitable neighborhood, he said.

Available units in New York City include a 670-square-foot one-bedroom apartment at AVA High Line in AvalonBay, priced at $ 4,785 per month plus $ 259 in utilities, according to the Landing website. Renting an empty room in the same building directly to AvalonBay on Dec. 1 would cost $ 4,447 per month, plus a refundable deposit of $ 2,000 for a 12-month lease, the owner’s website says.

Landing is offering sublets in several related buildings, including One Hudson Yards, where the company is looking for a monthly rent of $ 6,437, plus utilities.

For Related, Landing is a tenant like any other, with a standard, advertised price lease subject to the same rules as everyone else who lives there, said Related spokesperson Kathleen Corless. With a vacancy rate of 2% in Manhattan, Related is not looking for these arrangements, but other companies similar to Landing have leased and sublet units in the company’s buildings, she said.

As a tenant, Landing handles all interactions with the landlord, offers concierge services, and has a team of contract employees who agree to be the buffer for boring tasks like waiting for a plumber.

“We are focusing on more mobile professionals and people looking for freedom, flexibility and great experiences, but they don’t want to be tied together,” he said.

(Contact the reporter at [email protected].)

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