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New Startup 'Sentral' Pushes High-End Rental/Homesharing Apartments (seattlepi.com) 56

Posted by EditorDavid from the hall-a-billion-dollar-startups dept.
A new $500 million startup is now offering high-end apartments for short- and long-term rentals in America's "most vibrant, walkable neighborhoods". (And long-term renters can also avail themselves of its "turn-key homesharing program" to offset some of their rent.)

The Seattle Post-Intelligencer says it's "aimed mainly at tech workers, nomadic independent contractors and other folks whose work is no longer tied to a specific location." [A]menities might include workspaces offering private and collaborative office space. Inside the units themselves, residents might find work-from-home perks like adjustable height desks and ergonomic chairs. And let's not forget that work-life balance: Sentral buildings offer rooftop pools, outdoor kitchens and fire pits, gyms, photo booths, theaters, and more — as well as offering a plethora of curated events to its residents...

The folks behind the idea are savvy: CEO Jon Slavet is formerly of WeWork and Rodan + Fields. Michael Curtis, formerly VP of Engineering at Airbnb is now a strategy advisor at Sentral...

The price to lease at Sentral, given the amenities, isn't much higher than regular rent prices in the major cities it serves. The LIVE program offers designer-furnished homes for stays over 30 days starting at $2,500 a month. For comparison purposes, a studio in downtown Seattle listed on Craigslist (with none of the bling offered at Sentral) is asking $1,890 a month.

Sentral operates now in seven cities: LA, Austin, Chicago, Seattle, Denver, Chicago, Miami. An Atlanta location is next up, with more growth planned.
Sentral's press release calls them seven "vibrant gateway cities... a launchpad to explore the country's most exciting neighborhoods" (assisted by "a world-class onsite team that fosters a true sense of community"). Sentral enables residents to live or visit stylish buildings in the nation's most coveted cities for any period of time, whether a night, a month, or multiple years. Qualifying residents can also monetize their homes through Sentral's managed homeshare program... From the city registration process to logistical details such as housekeeping, insurance, photography, contactless check-in, and around-the-clock service, Sentral's turn-key platform makes homesharing seamless for hosts, enhancing their financial freedom and fueling their ability to travel and explore.
A recent tweet calls it "the future of living," while the company's new web site promises it offers "The comforts you crave + the freedom to travel."

"There has been a massive shift to a 'work-from-anywhere' culture that is blurring the lines among home, work, and travel," argues CEO Jon Slavet in Sentral's press release. And the lavish press release ends by saying that the company "is creating a global community of modern adventurers with the freedom to monetize their homes, explore their passion for travel, and live life on their own terms."
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New Startup 'Sentral' Pushes High-End Rental/Homesharing Apartments More

New Startup 'Sentral' Pushes High-End Rental/Homesharing Apartments

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  • Airbnb clone? (Score:3)

    by igreaterthanu ( 1942456 ) on Monday August 02, 2021 @04:03AM (#61646113)
    I can't see this really taking off.

    • Re: (Score:1)

      by Anonymous Coward

      But for rich people. In a global pandemic.

    • Re:Airbnb clone? (Score:5, Insightful)

      by Nrrqshrr ( 1879148 ) on Monday August 02, 2021 @04:25AM (#61646159)

      What made me laugh reading the very first sentence is the half a billion valuation for a company that makes no sense.
      Rich people don't shop with price tags in mind. This probably targets tiktok and instagram shitters who will rent a massive house for their weekend of pretending to be rich online. Is that enough of a market to value a company at 500 million bucks?
      Sounds like somebody gathered a bunch of VCs who missed the first Air BnB and sold them the idea that he's working on the second one.

      But hey, a fool and his money are easily parted.

      • That's not for "wealthy-rich" people, just "good tech-bro salary" rich who can afford a niche-ish apartment and to pack up and move every month. It even says it in the summary.

        Now whether or not it's dumb is another question. But it's clearly not intended for Jeff Bezos as the target audience.

    • Re:Airbnb clone? (Score:4, Insightful)

      by AmiMoJo ( 196126 ) on Monday August 02, 2021 @05:13AM (#61646231) Homepage Journal

      They can fuck right off. This is just another attempt to push more people away from owning their home to renting it.

      It's bad enough that you can't own some consumer products anymore, but your home is essential for stability and security. The move towards rent seeking bastards trying to own one of the most important and vital things in your life needs to be reversed.

      • repair and maintenance is the landlords issue when you rent so that is an up side for some.

        • repair and maintenance is the landlords issue when you rent so that is an up side for some.

          Which means having to wait for someone to fix whatever is wrong, short of a calamity such as a burst water pipe. Not to mention the noise of your neighbors at all hours of the day and night, their family reunions going on until 11 PM (if not longer) in the parking lot and not being able to have your windows open to get free cool air as a result, the sound of crying kids, arguments coming through the walls. Yeah

      • I agree with your post but what consumer products can I only rent and no longer buy? I own my home, a car, computers, tech shit. I own many power tools (at this point I have the tools for an entire remodel, if not exactly the craftsmanship or knowledge).

        What consumer products may I not own anymore?

        • Re: (Score:2)

          by AmiMoJo ( 196126 )

          Lots of things are moving to a subscription model. Audi offers subscription features in the car you already paid for, rent the heated seats by the month or they turn them off remotely.

          Many people buy games via app stores now, which are only long term rentals until they decide to turn off the servers.

    • Re:Airbnb clone? (Score:5, Interesting)

      by monkeyxpress ( 4016725 ) on Monday August 02, 2021 @06:40AM (#61646335)

      I actually like this sort of idea, but it has problems due to the tax system. The thing is, I quite like living in quirky apartments in city centres. I'm currently in a flat above a cafe and it's great. But I'd never buy this place. If the cafe closes down and turns into a fast food shop then this place would be uninhabitable.

      What would be great is if I could just own equity in a company that owned these sorts of apartments, and eventually I'd be able to own enough equity that what I pay in rent roughly zeros out with my dividend return. I'd then be an 'owner' but with the benefits of risk aggregation, and the ability to move around for work/lifestyle opportunities - which is also something I really value. For myself, this is vastly preferable to having to buy a small house in a suburb with a giant mortgage, just to get an unencumbered ownership title.

      The trouble though is that there are substantial tax advantages from owning. In most places there is no capital gains tax, and in the scheme I described above you have the problems that your dividends are taxed, so the 'effective' rent you'd have to pay to net out at zero is higher than being an owner occupier. So it just won't really work in the end.

      I do think, however, that there needs to be a look at new ownership models. The government and central banks of the world have decided to destroy home ownership as a path to middle-class capital accumulation, and treat it as just another asset class. In that case I think it is time to remove the tax advantages from ownership. You can't benefit from a system designed to support the middle class then rip up the ladder once you've gotten yours and say everyone just needs to compete in the 'markets' while vigorously protecting the tax advantages you're sitting on. Either housing is treated differently with the goal to equitable access, or it's just treated as any other asset. Right now we have the worst of both worlds, unless you already own a few houses.

      • Why not just buy Apple or MS stock then? I'm not even rich by /. standards but have enough in SPY to pay for rent in a reasonable COL city.

        I agree about the ownership model being a bunch of horseshit though. Everyone (including the middle class) looks at it as an investment so they don't mind any price as long as they'll get a mortgage because they know the bubble will just keep being inflated and propped up.

      • The government and central banks of the world have decided to destroy home ownership as a path to middle-class capital accumulation,

        What are you talking about?

    • Re:Airbnb clone? (Score:4, Interesting)

      by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Monday August 02, 2021 @08:18AM (#61646521) Homepage Journal

      I can, even if it appears to make no sense, because equity firms are buying up all the homes in markets with little availability, often at 10-25% OVER MARKET VALUE, and then turning around and turning them into rental properties. This is what happens when you don't expect the rich to pay taxes and they wind up sitting on all the money. And they do, because they hide it in a variety of tax havens where it's hard to go after; not just overseas, but also in perpetuities in US states that lock the money away in someone else's name.

      So they're buying up the property, even though it isn't depressed, since they have nowhere else to spend the money; there's not so much to invest in because people don't have money to spend on things. But they have to live somewhere, right? And if you own all the houses and won't sell them, they're going to have to come to you and pay you rent. And the banks that own so many of the houses due to their deliberately underwriting subprime mortgages love this, because it keeps property values high and that makes it look like the empty homes that they refuse to sell for market value are worth more money, which means it makes it look like they are worth more money.

      I can see this taking off straight into the stratosphere, and the American working class being fucked over again. It's literally happening already.

  • A "Savvy" Business (Score:5, Funny)

    by geekmux ( 1040042 ) on Monday August 02, 2021 @04:27AM (#61646167)

    "The folks behind the idea are savvy: CEO Jon Slavet is formerly of WeWork..."

    Wait, WeWork? This WeWork?

    "In September 2020, The Information reported the valuation of the company had fallen 89% since its failed IPO in 2019...In May 2021, the company posted a $2.1 billion loss..."

    What exactly is the definition of "savvy" in 21st Century business? The ability to make PT Barnum look like an honest ethical businessman?

    Why do I have a feeling the executive hallways in this new venture will be lined with the illustrious works of well-known artist Hunter Biden...

  • What now, High-End or Shared? (Score:4, Insightful)

    by nospam007 ( 722110 ) * on Monday August 02, 2021 @05:07AM (#61646223)

    Rich people don't share their 15 villas, 10 Apartments and 12 yachts.
    Ever!

    • High-end rental is like gourmet macdonald's hamburger, a pseudo-qualifier to stroke some egos

      • High-end rental is like gourmet macdonald's hamburger, a pseudo-qualifier to stroke some egos

        Just goes to show you how bad ego-stroking addiction REALLY is when greedy Attention Whores formulate a business plan like that in a COVID-infected world...

    • You learned that on duck tales, right?

  • Great machine for destroying investors' money (Score:4, Interesting)

    by bradley13 ( 1118935 ) on Monday August 02, 2021 @05:32AM (#61646271) Homepage

    There seems to be two aspects to this. Reality is likely to intervene on both of them.

    The first aspect: Owning and managing rental properties. This is where WeWork has run into trouble. That's a lot of capital tied down, plus you have to handle maintenance and repairs, janitorial services, rearranging stuff between renters, etc.. Selling this as luxury accommodations means that people's expectations will be high, so those mundane services had better be good.

    The second aspect: Fancy Airbnb. Rent out your entire home, for weeks or months. Honestly, there aren't going to be a lot of people wanting to do that. More likely, you will people who presently have rental properties, who want to run them under this program. Fine, but that's nothing special - it's just another platform to use for renting a house.

    Marketing this to "digital nomads" sounds cool and all, but: how many genuine digital nomads are there? Not many - most people want a home base. Their real clientele is more likely to be people on temporary assignments. There are already established services for finding them places to live.

    tl;dr: This is nothing new, and there is plenty of established competition. Insofar as they plan to own their properties: The mundane realities of property management do not scale, and are not any sort of high-tech business. Just like WeWork (which lost $3.2 billion in 2020), this will be a great machine for destroying investors' money.

    • I'm also wondering about their potential market. We rent out properties, and we basically see 3 types of tenants: 1) locals who want long term leases and bring their own furniture, 2) the "digital nomads" who are generally expats and primarily want a low rent; they are happy with somewhat run-down properties and cheap IKEA furniture because it saves them money. Yes, we get tenants like that who make upward of €100k and still want the 1 bedroom studio with shit furniture instead of a rather nice 2 be

      • I work in an industry that is mainly group #3, high salary and they want houses for 6 months to 2 years. The thing is that we just go through an agent, who contacts local estate agents and lines up a rental property on our behalf. This is how it has been done for 100 years, so other than adding the words "digital" this doesn't appear to be anything much different than a fancy airbnb.

      • There is a subset of #3– couples without kids that want space and location and usually end up with a grossly oversized house because it is all that offers the things they are after and isn’t much more expensive than a smaller place.

        By not doing short term (1 month) rentals these guys can get around a number of costs the AirBnB systems have (transient accommodation taxes, cleaning fees that can be 20-25% of the cost, etc.).

        I wouldn’t invest in them they have the exact same challenge as WeWo

        • The couples we get generally are of category #1: they want a bigger place but prefer to rent unfurnished, and they are still keen on saving money rather than go for luxury.

          • The couples I am thinking of are more nomadic. Looking for value, but focused on quality.

            I can see how someone thought this was a good idea but it sounds more like a real-estate investment trust than anything else, and as such I think it will be a struggle for them to hit critical mass.

    • Re: (Score:2)

      by cusco ( 717999 )

      There are already Airbnb/Venmo/Expedia/etc sites with those attributes and almost all have lower prices and an actual track record. Look for this one to crash and burn.

  • I doubt these upper end neighborhoods want these types of nomads. How long before lease agreements and HOAs have rules stipulating you can't rent out the property.

  • Meh (Score:3)

    by belg4mit ( 152620 ) on Monday August 02, 2021 @07:34AM (#61646419) Homepage

    Becase Bedly's business model is just screaming for more entrants, right?
    https://outpost-club.com/bedly-by-outpost [outpost-club.com]

  • on the homeowners being stupid enough to propose their properties for rent through Sentral - as if AirBnB didn't burn enough of them and teach them a lesson...

  • In Snow Crash, gated communities are more like countries. You have a passport and you have the freedom to go to any of the communities. I've always wondered if it was going to happen, and here we see the beginnings of it.

  • And be happy. However, there will be a few wealthy people (or governments) who own everything. At some point, they might start to ask why they need us.

  • You might have some traction here if you could rent a place in Maui, Crested Butte, Park City, Banff, or Fiji. Otherwise I don't see the play here.

  • I've never been able to quite figure out what "vibrance" is, other than that I really don't think I want any.
  • So now Hier BnB is a real thing?
  • If a lot of what makes a neighborhood vibrant in the first place is the relationships formed between the people who actually live there, what will this do at the margin to augment or disrupt that interconnectivity that makes people want to visit those neighborhoods? Will this just become a form of economic tourism into sterile "non-spaces", or amount to very little that Air BnB hasn't already brought about?

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