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Building: Archer Tower | Location: Denver, CO | Units: 316

Archer Tower is a 316-unit multifamily apartment complex located in Denver, Colorado and one of our most successfully onboarded buildings. In fact, it has effectively integrated the Pillow Residential program to maintain happy residents and acquire new, prospective tenants for over 8 months now.

However, it was almost a year ago when Archer Tower experienced a growing number of residents who were violating their leases by subletting their units on Airbnb. Many of the residents who frequently vacated their homes wanted to make some extra cash via secretly hosting short-term rentals. As a result, Archer Tower wanted to establish a transparent and mutually beneficial experience for everyone involved – building owners, property management, and residents – when this subletting activity takes place.

To tackle this issue, Archer Tower partnered with Pillow Residential to launch its program in the building. How did Pillow Residential help exactly? The Pillow Residential program enabled compliant short-term rentals at Archer Tower as a revenue-generating amenity for both building owners and residents. On top of that, Pillow Residential became an efficient tool for property management to monitor and control the short-term rental activities within the building.

Challenges Before Implementing Pillow

1. Liability

This was one of the largest concerns for Archer Tower. Archer Tower was almost entirely financially liable in the case that any accidents or damages occur on the premises while guests were present.

2. Transparency

Property management also had little control over the short-term rental activities going on inside Archer Tower. This was because the residents were not providing the building with any information regarding incoming guests. Archer Tower, therefore, had no way to monitor who the guests were or for how long they would be staying, or enforce any building rules.

3. Revenue Share

Despite short-term rental activity continuing to grow in the building, Archer Tower was unable to share in any of the extra revenue and benefits produced for the residents. At the same time, Archer Tower could not stop this outright, since policing short-term rental sites would be very time-consuming, costly, and uncertain.

How Pillow Solved These Problems

1. Pillow removed liability from Archer Tower by integrating 5 layers of coverage:

  • Security Deposit – These are security deposits that all listings hold and that residents can collect
  • Airbnb Host Guarantee – Ensures protection for up to $1,000,000 in damages
  • Renter’s Insurance – Provides coverage up to $100k per resident
  • Building Commercial Policy – Complete coverage beyond renter’s insurance
  • Pillow Umbrella Policy – Up to $25k in liability coverage

2. Pillow provided the tools necessary to track and monitor all short-term rental activity.

As part of the stipulations of the program, Pillow required participating residents to sign a lease addendum. This gave property managers permission to access real-time information regarding all hosting activities (e.g. number of guests, which unit they’re in, duration of stay) after residents connected their Airbnb accounts via the Pillow platform. Furthermore, Pillow ensures that all guests are verified and criminally screened, and readily provides all available information about each and every guest to property management.

3. Pillow opened the door to a new revenue stream.

Lastly, Pillow automatically facilitates profit shares for Archer Tower whenever residents sublet their units by systematically tracking all Airbnb reservations occurring within Archer Tower. In fact, Pillow has ensured that 10% of all profit from short-term rentals in the building are paid out to Archer Tower every month.

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Results & Return on Investment

By creating a layer of transparency not achievable before, Pillow Residential enabled Archer Tower to introduce Airbnb rentals as an additional, revenue-generating amenity for itself with minimal risk. Blake Hayunga is the Chief Operating Officer of Archer Tower. Blake is now able to offer an attractive amenity at Archer Tower at zero cost, making housing more affordable for his residents, but also increasing the overall value of his investment.

“Pillow helps residents address the question of affordability. It helps guests gain access to really cool locations. And it helps building owners organize that process and take some control of it, but also participate in the revenue stream. That revenue stream is bigger than what we would be able to do on our own trying to organize the process.”

-Blake Hayunga, COO of Archer Tower

In a Bisnow article featuring Pillow, Blake talks about his decision to partner with Pillow Residential, “Apartment owners do not innovate easily. It’s a slow-moving train and those that are willing to innovate in some meaningful way, outperform.” He revealed that whatever additional revenue Archer Tower makes from short-term rentals, it reinvests back into resident services. “My goal as a building owner is to create the happiest residents I can: the happier the residents, the better our assets perform financially.”  

Moving forward, Archer Tower has been actively marketing the Pillow Residential amenity to new residents, effectively decreasing vacancy in the apartment complex. In fact, Archer Tower has been able to produce 20% more applications since implementing this amenity.

For more insights into the short-term rental market, make sure to subscribe to our blog!

 

Written by Harry Lee · September 19, 2017

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