The developer of a new apartment building in downtown Baltimore has partnered with a hotel start-up to offer some of the units as hotel rooms as it seeks tenants in the city’s competitive apartment market.
WhyHotel will operate a “pop-up” hotel in the new upscale apartment building at 225 N. Calvert St., a concept it is bringing to other newly built apartments in other U.S. cities.
Developed by Monument Realty, the building is currently leasing about 350 one- and two-bedroom apartments for $1,800 to $2,500 a month, which makes it less expensive than other new high-rise apartment buildings but more than some more modest new buildings opening around the city center.
Michael Darby, principal of Monument Realty, said the units are on pace to rent at about 20 a month, though the building is just completed and efforts to fill it are just ramping up.
He said he thought the hotel was a great idea because putting people inside immediately created “vibrancy,” as well as provides income.
“As we lease up, the place will feel more energized,” Darby said. “We thought it was a great idea.”
Monument Realty brought in WhyHotel, which raised $3.94 million in seed funding from venture capital firm Camber Creek and other real estate entities for its launch.
WhyHotel tested the idea in 50 units of a large apartment building called the Bartlett in Pentagon City, just outside Washington, D.C. In the months the hotel was there, it was up to 85 percent occupied, said Bao Vuong, president and co-founder of WhyHotel.
“We partner with new multifamily builders on their apartment buildings and take around 50 percent of the units and operate a 24/7 staffed hotel,” Vuong said. “In 18 to 24 months, as the building naturally fills with long-term residents, we wind down… It de-risks the project.”
The apartments will be furnished for hotel guests and offer traditional hotel services by WhyHotel staff, Vuong said. The company gets local licenses and pays local occupancy taxes.
To start, the rates will be $129 for a night or $74 a night plus a cleaning fee if the stays are longer. Guests can stay up to 90 days.
Studies by the Downtown Partnership show that demand for rental housing remains strong around downtown, but the apartments will be competing with many other units just opening and opening soon.
The group’s latest housing study found that there is still a lot of room for residents downtown — in up to 7,000 more units over five years. The occupancy rate downtown is currently 93 percent.
Despite the flurry of apartment development, other properties in and around downtown have leased up ahead of schedule, said Michael Evitts, a spokesman for the partnership. Still, he said, bringing in a hotel was a good idea to “provide occupancy, get lights on in the windows at night and give exposure to the apartment building while they’re in the leasing up phase.”