CorpHousing Group Inc. (Nasdaq: CHG), which utilizes a long-term lease, asset-light business model to acquire and manage a growing portfolio of short-term rental properties in major metropolitan cities, today announced it has acquired long-term rights for 217 units in downtown Manhattan in New York through a 15-year Master Lease Agreement with one of the largest privately held real estate investment companies in the world.
The 217 units associated with this luxury hotel is the first step in the Company’s post IPO scaling strategy and increases units by 34% bringing CHG’s total units under long-term lease to 853. CorpHousing plans to start operating this property during Q4 2022.
The signing of this MLA follows similar recent agreements entered into by CHG with The Blakely Hotel (New York City), Marriott Herald Square Hotel (New York City), and Georgetown Suites Harbour (Washington, DC). CHG utilizes an asset-light business model and leverages the latest technology to cost-effectively identify, acquire, manage and market these units to business and vacation travelers, while providing its guests Heroic ServiceTM under the LuxUrbanTM brand.
The new addition to the CHG Portfolio is a premier luxury hotel ideally located in downtown Manhattan. The property includes beautifully appointed rooms, a state-of-the-art fitness center, outdoor terrace, and rooftop that offers panoramic vistas of the New York City skyline. The Company will operate this hotel under its customer-facing hospitality brand, LuxUrban.
Brian Ferdinand, Chairman and Chief Executive Officer of CorpHousing Group, stated, “We are proud to announce this latest Master Lease Agreement immediately following our IPO, continuing the shift in our strategy away from multi-family apartments in favor of leasing dislocated hotel properties in desirable urban locations. We are executing on a disciplined acquisition strategy through long-term lease agreements with thousands of high-quality hotel units currently under LOI with a variety of potential partners, which we expect to start closing in parallel with the execution of this MLA, which are designed to generate more favorable economics, asset-light operations, and higher long-term returns. Our approach provides property owners the ability to create stable cash flow streams to maximize returns on their properties, which have been significantly impacted by restrictions on travel and leisure activities due to the pandemic. By leveraging technology to increase occupancy rates and operational efficiency, we are generating high-margin, and what we believe are predictable, revenue streams. With eight hotels now in our portfolio, we expect the addition of this new luxury hotel will significantly expand our annualized net revenue while expanding our operating margins, which we believe will continue to grow over time as we further enhance the efficiency of our leased properties. We look forward to closing additional large-scale lease transactions in our pipeline over the coming months and beyond. Overall, we believe we have built a highly scalable and profitable business model to drive meaningful returns for our shareholders.”