With thousands of new luxury apartments flooding the uptown market in Charlotte, a San Francisco-based startup has a possible solution: Turn some of them into hotel rooms.
Lyric has leased a whole floor of one of the two SkyHouse Charlotte apartment towers. The company is renting the fully furnished rooms to travelers, who book through Lyric and check in with SkyHouse’s on-site concierge when they arrive.
"We operate on our own dedicated floor," said Zach Merritt, director of real estate for Lyric. "We do a long-term lease with that building owner. SkyHouse is able to diversify their risk."
The 10 apartments, a collection of studio and one-bedroom units on the 21st floor, are listed for between roughly $102 and $232 a night, prices that vary depending on the day and demand. Lyric has a similar arrangement with a SkyHouse apartment building in Dallas.
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"It’s worked out really well for us," said Thornton Kennedy, a representative for SkyHouse developer Novare Group. "We expect this to be part of our operating platform going forward."
SkyHouse Charlotte’s grand opening event in 2015.
Merritt said travelers booking the rooms range from business travelers to people coming for weddings and family visits. Charlotte is an attractive city for Lyric because of its large business travel market, with lots of travelers who come for a week or more at a time, for jobs or consulting gigs at banks and other firms headquartered in the city.
Here’s how it works: Travelers book a room with Lyric, which performs a background check as well. When they arrive at the apartments, the concierge lets them up to the 21st floor, where they can access their room via an electronic door lock. They also have access to the building’s amenities, such as the gym and pool.
Pricey uptown apartments have Charlotte’s highest vacancy rates. Why are more coming?
A decibel meter in the room reports to Lyric if guests are making too much noise, so they can be notified before regular tenants on other floors complain. When guests check out, a housekeeping service hired by Lyric cleans and sets up the room for the next guest, similar to a hotel.
The rooms make up only a small percentage of SkyHouse’s 672 studio, one- and two-bedroom units. So far, SkyHouse is Lyric’s only Charlotte location, but the company plans to expand, both in Charlotte and nationally, Merritt said. Their goal is to have about 1,000 apartments for rent across the largest cities in the U.S. by the end of the year, Merritt said.
Chart by Ely Portillo
Lyric will have plenty of opportunities to find apartments in Charlotte, which has a glut of luxury buildings hitting the market in uptown. According to figures released in March, uptown has the highest apartment vacancy rate in Charlotte, at 21.8 percent. That translates into more than 1,100 vacant apartments, according to tracking service Real Data.
That’s largely a byproduct of the uptown market’s rapid growth. The number of apartments uptown has more than doubled since 2015, to more than 5,000, and that expansion will continue as developers chase sky-high rents. The number of apartments uptown is expected to reach more than 6,700 in the next few years.
"We will have additional presence in Charlotte in 2018," said Merritt. "We like that market a lot."