When entrepreneur Bill Smith moved to San Francisco to work on Shipt, his grocery delivery startup, he found the most painful part was dealing with housing. Specifically, the constant hoops he needed to jump through to find an apartment for his family, and move all his material possessions across the country.
“I’ve seen the pain of establishing a home in a new city,” he says. “It just doesn’t make sense to have to own all these pieces of furniture and have all this cash tied up in things.”
His experience inspired a new business meant to solve these rental woes. Landing, a short-term rental startup that launched last June, complete with a whimsical, millennial-friendly logo font, uses a membership model to offer a turnkey solution for renters and a new way for large landlords to maximize profits. Renters in San Francisco, Los Angeles, Austin, Nashville, Chicago, New York, Washington D.C., and Birmingham, Alabama (Smith’s hometown) can lease a fully furnished Landing apartment on a month-to-month basis with no security deposit, and cancel their stay with a 30-day notice.
“We’re serving the mobile professional, people who are 25 to 40, professionals who want to be open to opportunities and be able to move around if they need to,” Smith told Curbed. “Our value proposition is that you can sign up for an apartment immediately online. Think about the hassle of renting in New York, with all the calls and followups and headaches.”
Landing is also a demonstration of vertical integration in a growing market of rental alternatives targeting millennial professionals. Coliving, the “private bedroom, shared common areas” concept embraced by a number of housing startups, cuts costs by focusing on shared space and amenities. Landing is taking a different approach.
Smith’s firm furnishes all the apartments with its own custom furniture. Everything from the bed frame and mattress to the nightstand—which include USB plugs for charging devices—is designed by an in-house team and made via a network of contract manufacturers both in the U.S. and abroad. That means the cost of furniture, the company’s largest expense, has been cut significantly. Smith estimates they save 40 to 50 percent versus wholesale prices.
“We want people to show up and feel like they’re living in a five-star hotel,” says Smith.
Landing also doesn’t own the units. The company has deals with 25 large corporate landlords, such as Avalon Bay and Related, and leases unused one-bedroom and studio units in their new high-rises which they then offer to members, effectively subleasing residential space. Landing handles all interactions with landlords, and also offers concierge services to its members.
These members pay a $199 annual membership fee, and their monthly rent is higher—by 10 to 13 percent a month, depending on the unit and location—than what standard renters pay in the same building. Say a unit in New York typically rents for $3,000 a month. A Hello Landing member would pay a premium, $3,300 a month, as well as the membership fee. That would add up to $3,799 a year more in additional rent and fees than what a neighbor pays for a similar unit down the hall. But since members are not paying any security deposits, and don’t need to pay to move furniture, Smith argues they’re saving money in the long run.
Currently, the site lists apartments available in San Francisco’s SoMa district (from $4,954 a month), a luxury Los Angeles apartment in Hollywood ($3,438 a month), and a Tribeca one-bedroom in New York City ($5,165 a month), all available today. Utilities aren’t included, and some units require an additional fee to access building amenities.
Smith has built the company thus far using $15 million of the proceeds from the 2017 sale of Shipt to Target for $550 million.
Currently, Landing has roughly 300 units and as many members in eight U.S. cities. Smith says Landing is an operationally complex business, but believes the path to growth and scaling up is “pretty straightforward.” He plans to expand Landing to 30 cities and a couple of thousand units by the end of 2020.
“I’ve owned multifamily properties in the past, and thought this was the way it should work,” he says. “Renters shouldn’t be locked in and tied down by the archaic processes of real estate today.”