Hospitality Investors Are Making Way For 'Bleisure' Customers

Economic conditions in some urban areas have spawned pop-up restaurants and clothing stores as investors and owners attempt to get a taste of the local buyer environment before committing to full-time brick-and-mortar. 

But that concept has been taken to a whole new level by a Washington, D.C.-based company trying to add an apartmentlike lifestyle to conventional hotel properties. 

Placemakr, which bills itself as a flexible-use multifamily property operator, is operating hotel properties "through seasons and cycles"  by merging the concepts of both short-term and long-term rentals in a number of metro areas, including D.C.; Nashville, Tennessee; New York City; and San Jose, California. The company partners with developers, property operators and investors to develop a collection of apartmentlike spaces ranging from brand new to established apartments in an effort to maximize its value. But from a consumer standpoint, the biggest lure is to help the business traveler feel at home and then allow them to tack on some vacation time.  

"Business leisure is really taking off," Placemakr Managing Partner of Investments Will Hu told Benzinga. "Overall, our DNA is the business traveler, and we have built a strong book of business with companies and in D.C. with Department of State entities — especially when people were being called back to the capital from overseas during and after COVID." 

Hospitality.net's 2023 Travel Predictions report found that a worker's willingness to have "bleisure" trips — business trips combined with a personal vacation — is increasing. In turn, Placemakr's portfolio, much of which was formerly under the WhyHotel brand, is offering bleisure-suited amenities like full kitchens and washers and dryers. But if you thought that Placemakr was attempting to usurp Airbnb and VRBO in the short-term rental market, you'd be wrong. 

"Airbnb and VRBO  are partners with us. We use them for distribution as well as Expedia, Booking.com and Tripadvisor in addition to our in-house sales team, which books direct," Hu said.  

Hu, who lives in San Francisco, left the conventional hospitality and multifamily acquisition space almost a decade ago after growing frustrated by the slow pace of innovation and creativity. He found a more creative path in Placemakr.

"I was looking personally to do something more innovative in real estate and I thought what they were doing was extremely interesting," he said. "Seeing the acceleration of the use of apartments as hotels and value creation from a different use was so immense, it felt like something I had to be a part of."  

Placemaker has raised $65 million over the past year, following its initial raise of $95 million in 2021 for a total of $350 million in capital. The company has received funding from investors, including Highland Capital Partners, Harbert Growth Partners, Bernstein Management Corp., Camber Creek and Gaw Capital USA.

Hu says investors have been attracted to Placemker's business model because "we are asset light, so when we acquire a property, we do it in a joint venture with anyone from a family office and value-add fund to large hedge funds."  

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Photo provided by Placemakr