By Meghan Hall
Hospitality brand locale opens first west coast location at The Landing in San Francisco
Hospitality companies have come a long way from the standard, one-size-fits-all hotel rooms and have created an array of accommodation options never-before considered with the likes of VRBO and AirBnB. Locale, an Austin, Texas-based hospitality firm, is working to introduce another accommodation model to market. Called an “apart-hotel,” Locale’s units are meant to act like the Goldie Locks of the hospitality industry, serving as a fit between an AirBnB and traditional hotel experience for long-term and extended stay travelers.
“I never really thought professionally about the combination of real estate and hospitality until I went to get my MBA. I worked for a boutique hotel group and decided that was really my calling,” explained Locale’s founder, Nitesh Gandhi. “But the vacation rental world was really starting to pick up in 2013 and 2014, with AirBnB and others. I spent some time launching a high-end vacation rental company in Austin. After that experience, I saw an opportunity to merge both of these together to create this hybrid hotel experience.”
Locale was officially started in late 2016 with the intent of leveraging existing apartment buildings, which, in Gandhi’s eyes, were of the same caliber of a boutique hotel, but offered full-sized units as opposed to just the standard bedroom and bathroom.
Locale to me was just the perfect way to blend those experiences
“Locale to me was just the perfect way to blend those experiences, working with apartment buildings that are for the most part now boutique hotels, especially with amenities areas, but work with them to bring that vacation rental world to buildings that are already like four- and four-and-a-half star hotels,” continued Gandhi.
Generally, Locale is targeting the extended stay and corporate housing sector. The company has opened several locations already in Dallas, Austin, Nashville and, most recently, San Francisco. Expanding to San Francisco was an easy choice for the company, according to Gandhi, who stated that the city’s rich entrepreneurial atmosphere and vibrant economy were just two of several important factors in the decision.
“Especially for us, as a hospitality start-up, it is also a market that a lot of our core demographic resides in and travels to,” said Gandhi. “San Francisco was a no-brainer in terms of us expanding into a market highly relevant to our existing demographic, that upscale older millennial or younger professional traveler who seeks out these types of experiences.”
In looking for a potential partner, Locale settled on The Landing, a luxury apartment complex located at 1395 22nd Street, in San Francisco’s up-and-coming Dogpatch Neighborhood. Locale manages 35 one-, two- and three-bedroom residences in the newly constructed, 263- unit apartment complex and is currently accommodating guests seeking stays of 30 nights or more. Rates, according to Locale’s website, begin at $5,000 per month. Units come fully equipped with a gourmet kitchen, washer and dryer, private outdoor balcony, free wi-fi, Roku smart TV and a Nespresso machine. Complex amenities include a 24-hour fitness center, weekly instructed fitness classes, a coworking lab and coding room, rooftop park and theater and gaming room.
“The Landing, in a way, defines everything about our traveler in a specific building in San Francisco, in a neighborhood that ultimately defines those same characteristics: up-and-coming, experience-driven, with incredible restaurants, bars, nightlife,” said Gandhi. “It’s just top to bottom a highly amenitized building that really for our guests provides a well-rounded experience not just inside the apartment, but outside of the building.”
In addition, Locale invests in the units that it master leases to buy high-quality furniture and finish out the spaces. “I think what [landlords] find particularly exciting about us is that we’re coming in and investing between 20 to 30 percent more in the actual furniture and design and experience of the stay, whereas typical extended stay providers often rent furniture and have not really chosen to invest in the actual experience,” added Gandhi.
When Locale partners with a multifamily operator, the company typically leases up 10 to 20 percent of the building, on a two to a four-year term. The partnership between property owners and Locale benefits everyone involved, and feedback from residents and owners alike has been positive, explained Gandhi.
“Generally, there is a really strong appetite to bring us in, to help us lease the building, especially in a lease-up where right off the bat we’re leasing a strong percentage of the inventory of the building,” said Gandhi. “Or in a case like The Landing, where we’re focusing on corporate housing and extended travel, we’re bringing in ultimately could-be residents of the building. It’s a really strong, win-win partnership.”
Gandhi estimates that about one percent of Locale’s clients end up leasing with the building itself after staying in one of Locale’s units, a number that, he says, is fairly strong across Locale’s entire portfolio. Ultimately, Locale is hoping to expand its presence to other cities throughout the United States, and it is launching in Denver this fall. Markets like Portland and Seattle are also on the docket for the next several years, as well.
“When we start to talk about the actual experience that we’re actually investing in the upscale design and quality, then owners get pretty excited about it,” said Gandhi. “Ultimately, we’re trying to find a joint solution that works best for all parties involved.”
Photos courtesy of Locale