Luxury renters want more than amenities—they want an experience.Aman. Ritz-Carlton. Four Seasons. Their influence is reshaping high-end multifamily living.
Great piece. I floated this “hotel-grade living” concept years ago and got blank stares from brokers, other GPs, even an LP buddy I’m close with. In hindsight, I think they weren’t skeptical of the idea—just of the fact that a 30-year-old me could actually pull it off.
Then a deal hit the market that proved the whole thesis. Sponsor bought up every unit in a tired ‘70s condo complex in a secondary Sunbelt MSA I’d bought a couple of deals in. Full gut job.
Think: Miele/Wolf kitchens, spa showers, Equinox-style gym, saltwater infinity pool with teak deck and cabanas, virtual concierge, outdoor yoga, First Friday mixers, etc. Rents jumped from $1,000 to $2,500+ in under 18 months, even a couple of rookie NBA guys moved in.
The deal generated a project-level 2.8x MOIC inside 2 years. GP had put up a 10% co-invest but let friends/family into the GP, so he walked away with something like a 15x MOIC. It was on smaller numbers to be fair bc of the friends/family co-GPs but still. Don't need to do a 15x multiple that frequently before you're getting into stupid numbers.
I’m finally in a position to run this play myself and scouting distressed B-/C+ assets in great locations. The opportunity is there if you’re willing to spend real capex and think past granite counters and LVT. My angle is bundling: rent + utilities + gig-speed Wi-Fi + optional upgrades like housekeeping, valet laundry, furnished units w/ curated design, dog walking, etc.
The goal is to make moving so annoying it’s functionally irrational. You’re not just switching apartments—you’re canceling ten services and rebuilding your lifestyle from scratch.
And honestly, this whole thesis stems from a macro view I have about CRE in general: 99% of real estate GPs are actually dumb. Like, truly. Somewhere along the way, everyone just agreed 30–50% annual turnover is “normal,” despite the fact that literally every other business treats customer retention like a religion. Imagine if Verizon lost 40% of their users every year. Heads would roll. But in multifamily? That’s Tuesday.
Rant finished & you got yourself a new subscriber my friend 😊👍
Great to hear your story Josh! Thanks for sharing that. I am convinced as well of this as a long term play. When you sell a product you should aim at the top of the market because that's where the margins are right? Business 101, but most aim for high unit counts and repetition as that's where institutions want to write checks (>$10M)....That's not to say you can't get this strategy funded now that is more proven, but there is still plenty of runway. Great to connect with you and thanks for subscribing!
Great piece. I floated this “hotel-grade living” concept years ago and got blank stares from brokers, other GPs, even an LP buddy I’m close with. In hindsight, I think they weren’t skeptical of the idea—just of the fact that a 30-year-old me could actually pull it off.
Then a deal hit the market that proved the whole thesis. Sponsor bought up every unit in a tired ‘70s condo complex in a secondary Sunbelt MSA I’d bought a couple of deals in. Full gut job.
Think: Miele/Wolf kitchens, spa showers, Equinox-style gym, saltwater infinity pool with teak deck and cabanas, virtual concierge, outdoor yoga, First Friday mixers, etc. Rents jumped from $1,000 to $2,500+ in under 18 months, even a couple of rookie NBA guys moved in.
The deal generated a project-level 2.8x MOIC inside 2 years. GP had put up a 10% co-invest but let friends/family into the GP, so he walked away with something like a 15x MOIC. It was on smaller numbers to be fair bc of the friends/family co-GPs but still. Don't need to do a 15x multiple that frequently before you're getting into stupid numbers.
I’m finally in a position to run this play myself and scouting distressed B-/C+ assets in great locations. The opportunity is there if you’re willing to spend real capex and think past granite counters and LVT. My angle is bundling: rent + utilities + gig-speed Wi-Fi + optional upgrades like housekeeping, valet laundry, furnished units w/ curated design, dog walking, etc.
The goal is to make moving so annoying it’s functionally irrational. You’re not just switching apartments—you’re canceling ten services and rebuilding your lifestyle from scratch.
And honestly, this whole thesis stems from a macro view I have about CRE in general: 99% of real estate GPs are actually dumb. Like, truly. Somewhere along the way, everyone just agreed 30–50% annual turnover is “normal,” despite the fact that literally every other business treats customer retention like a religion. Imagine if Verizon lost 40% of their users every year. Heads would roll. But in multifamily? That’s Tuesday.
Rant finished & you got yourself a new subscriber my friend 😊👍
Great to hear your story Josh! Thanks for sharing that. I am convinced as well of this as a long term play. When you sell a product you should aim at the top of the market because that's where the margins are right? Business 101, but most aim for high unit counts and repetition as that's where institutions want to write checks (>$10M)....That's not to say you can't get this strategy funded now that is more proven, but there is still plenty of runway. Great to connect with you and thanks for subscribing!
I’m all about this stuff. It ain’t living if you can’t throw a little (service) hospitality in there