Would you rent a 756-square-foot two-bedroom condo near Vancouver General Hospital for $4,950 a month? Probably not, but some people will. Or at least, some company will pay that on their behalf. It’s called corporate housing, and it’s the segment of the rental market that provides fully furnished condos and houses, usually with cleaning services, on a short-term basis.
The high rents for corporate housing present a business opportunity for investors and for home owners who can live somewhere else while they rent out their property.
Demand is high. ”Vancouver is expecting a record year in 2014,” according to the latest overview of the corporate housing and executive suite market from the Corporate Housing Providers Association (CHPA) of Indianapolis.
And to what does the city owe this boon?
The numbers in the report, which has tracked this segment of the real estate market in the city since 2010, indicate that the supply of units is being met with strong demand and steady rates.
Corporate housing is typically used to accommodate temporary workers, as well as people who require short-term accommodation when they’re displaced by an event insurance covers. Similar to hotel accommodation, it provides companies with a reliable pool of rooms. Vancouver-based HighStreet Accommodations, for example, aims to house people within two hours of a request. The average length of stay last year was 81 days.
Key sources of demand in recent years have been the software sector, with the strength of the market increasing as the financial crisis of 2008 falls further into the past.
Conditions improved markedly following 2010, the first year for which the CHPA gathered data on the Vancouver market. Average daily rates have typically been between $126 and $128 in the past three years, up from $108 in 2010. Similarly, occupancy is running at 83%—up from just 68% four years ago.
Combined with an expected reduction of more than 300 units this year that will tighten supply, prospects for ongoing strength in the market are good.
There are currently an estimated 1,707 designated corporate housing units in the city.