The long-awaited tower project at 48 East Avenue in downtown Austin’s Rainey Street District won’t be home to either condos or apartments, as previously reported during various stages of the development’s roughly six-year lifespan — instead, the 33-floor building will be built as a 249-unit hotel, but that’s really only half the story.
In line with reports from this site back in January, the 48 East Avenue project will indeed rise as a “Powered by Airbnb” community designed for home sharing, but rather than the Niido brand previously anticipated, the property will instead soon become the first location of a new hospitality concept called Natiivo.
According to a press release issued today, Austin real estate firms Pearlstone Partners and the Miami-based Newgard Development Group are jointly developing the building, which will be operated by NGD Homesharing, another Miami firm behind both the Niido and Natiivo brand concepts. Newgard CEO Harvey Hernandez is also the founder and CEO of NGD Homesharing, which currently operates Newgard-owned Niido properties in Orlando and Nashville. The Austin Natiivo is scheduled to open in September 2021, with a 48-story Miami location expected by Spring 2022 and “planned expansion to additional U.S. cities underway.”
Located at 48 East Avenue in downtown Austin’s trendy Rainey Street District, Natiivo Austin will feature 33 floors and 249 units, comprised of fully-amenitized and furnished studios, one-bedroom and two-bedroom hotel-licensed homes. Co-developed by Newgard Development Group and Pearlstone Partners, with architecture by STG Design and interiors by New York-based INC Architecture and Design, the building will feature handpicked furnishings, native design elements, hyperlocal touches and insider Austin culture in every unit, its lobby and common areas. Natiivo Austin will seamlessly combine co-working spaces, a cafe lounge, a spa-inspired fitness center and a rooftop pool deck with private cabanas and lounge for enhanced local stays.
— Natiivo Announcement, June 18, 2019
So what’s the difference between Niido and Natiivo? While Niido properties are essentially serviced apartment communities designed for tenants to easily rent out their units via Airbnb in exchange for a cut of the profits, the Natiivo concept will instead be permitted, built, licensed, and operated as a hotel, complete with 24-hour concierge, valet parking, and other hospitality features you might expect.
With this regulatory model in place, individuals can buy units in the building, stay in them at their leisure — though, as a hotel, the building cannot be used as an owner’s primary residence — and rent their unit or units to guests for supplemental income whenever they choose as part of Airbnb’s Friendly Buildings Program.
“As we were developing the first Niido properties, we heard from people who were interested in buying,” says Hernandez. “But that’s not what we were doing with Niido, so we needed to create another product that carried a hotel license and allowed ownership as an investment.” The Natiivo concept, he says, creates income opportunities for a selection of buyers who might not otherwise have the capital or time to operate an investment property of this variety.
Owners, per the press release, can either list their units for rental independently or through the building’s management, which offers a few extra perks for those who choose to let Natiivo take the reins in exchange for a percentage of revenue:
For units directly hosted by Natiivo, guests check into their personal home away from home, featuring premium linens, comfortable robes and slippers, in-room laundry, generous layouts and kitchens stocked with the essentials; ahead of their arrival, guests are able to further customize their stay, including a custom-stocked fridge with local meal kits, dog-walking services, fresh-cut flowers and more.
Unique to each Natiivo is an onsite MasterHost that serves as an elevated concierge, a resource available to both owners and guests. Available around the clock, MasterHosts are Natiivo-certified, experienced Airbnb hosts and local experts, offering an inside view to the best restaurants, shopping, attractions, entertainment and more.
— Natiivo Announcement, June 18, 2019
Another advantage the Natiivo brand has over Niido? It’s legal to build it here. A Niido property, built as a residential rental community, would violate Austin’s 25 percent cap on licensed short-term rental units within a single complex, meaning only a quarter of the community’s residents would be allowed to rent out their units — “and that’s against what we stand for,” Hernandez explains. The Natiivo concept, on the other hand, is permitted under Austin’s code as long as the building is properly licensed, taxed, and not used as an owner’s primary residence.
With Natiivo, Hernandez says NGD hopes to enter markets where development might otherwise be prevented by a given city’s regulatory environment concerning short-term rentals, which isn’t a bad tool to have in your toolbox as many governments around the world work to restrict the operations and scale of home sharing services like Airbnb. Though there are vaguely similar condo hotel and timeshare-style vacation properties along with short-term rental outfits like The Guild in Austin, the Natiivo concept and its ownership model appears truly unique for the local market, and Pearlstone CEO Robert Lee says the interest he’s seen in the brand reflects that.
“It takes about 10 minutes to explain it to someone before they tell me ‘I want in,’” says Lee. “A lot of people in the hospitality industry are already lining up to do their own versions of this idea, but we think the best thing anyone can do for your reputation is copy you.”
It's rare to see the birth of a totally new product type. STR is effectively banned by downtown condo HOAs. Railyard and Brazos Lofts – the only DT buildings that allow STR – are likely to be sold soon, so Natiivo could become the only downtown condo building to allow STR. https://t.co/NPbFOkCrSo
— Jude Galligan (@downtown_austin) June 19, 2019