This real estate company helps developers pivot between hotel, short- and long-term living spaces. See the pitch deck behind its $65 million funding round.
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- Placemakr runs apartment buildings like hotels, with short- and long-term leases on furnished rooms.
- The company is now buying buildings of its own and is eyeing an office conversion.
- CEO Jason Fudin walked us through the deck he used to raise $65 million.
Things have changed drastically in the world of real estate since the coronavirus upended life three years ago. The rise of digital nomads, the short-term shocks to hospitality and retail properties, and the long-term pain for office landlords have all reshuffled the decks.
Washington D.C.-based Placemakr, founded in 2018, has evolved, too. The company, first known as WhyHotel, which served developers by turning empty spaces in luxury apartment buildings into “pop-up” hotels, suffered early in the pandemic. It made “significant” layoffs in April 2020, as unemployment skyrocketed and many of its competitors shuttered.
Now, the company has rebranded by expanding its product line into different forms of short-, medium-, and long-term rentals. Getting to this more diversified model was always part of the plan, said CEO and cofounder Jason Fudin.
The company now offers pop-up hotels and furnished and unfurnished apartments, with their uses being flexible as seasonal demands and trends require. For example, a property in Boston might be more short-term rental based during the summer, while long-term leases make more sense during the cold winters.
Placemakr partners with major landlords such as Equity Residential and Brookfield to rent out portions of their buildings and has over $1 billion worth of assets under its management. It has also set up a real estate fund in the OpCo/PropCo model, for purchasing real estate on its own.
“If you strip down the emotional piece of it, the most valuable real estate is real estate that has an increased cash flow and reduced volatility,” Fudin said. Placemakr meets those terms by combining the relative safety of multifamily properties with the typically higher revenues of the hospitality sector, he said.
The company is now betting on another post-COVID trend — the conversion of obsolete office buildings into other uses, such as housing.
Using its PropCo fund, the company recently purchased an office building near downtown Washington, DC, with plans to make it a Placemakr property. While conversions don’t always pencil out, this one can because it’s a smaller office with a floorplan that can be adapted to apartments, Fudin said.
“This property is the exception, not the rule,” said Fudin, who has experience with conversions when working with Vornado Realty Trust. Placemakr has already been operating a former office to residential conversion in the New York City building that used to house WeLive, WeWork’s coliving brand.
Placemakr recently announced a $65 million Series C, with capital raised from experienced proptech venture capital players Camber Creek and real estate investors like Bernstein Management Corporation. Fudin walked us through the deck he used to raise the round, which he expects to be Placemakr’s final venture round.