The “home-sharing” concept of the 33-floor Natiivo tower, now under construction at 48 East Avenue on the edge of downtown Austin’s ever-growing Rainey Street District, will introduce some new forces to the local hospitality and short-term rental market. In fact, if we were advertising the project, the first of its kind in the city, we might describe its potential effects as “disruption” — even if that sounds a little hokey.
The creation of local real estate firm Pearlstone Partners and the Miami-based Newgard Development Group, Natiivo celebrates the opening of its downtown sales gallery this morning at 219 West Fourth Street, also known as the southeast corner of Fourth and Lavaca Streets — and the developers are commemorating that milestone by releasing a couple of new interior renderings of the building, showing the design and finishes of a bedroom and bathroom in one of its units:
The Natiivo sales gallery also includes a physical model of the tower, and if you’re familiar with our work, you’ll know we get pretty hyped about that sort of thing:
Built and permitted essentially as a hotel, Natiivo’s 249 furnished units, including studios, one-bedrooms, and two-bedrooms, are sold to individual buyers in roughly the same vein as vacation properties. As the owner, you can stay there whenever you like — though you can’t occupy your unit as a primary residence — but more importantly, you can rent that unit to guests on Airbnb (or other similar platforms), with the building handling the nitty gritty management stuff like cleaning and laundry service in exchange for a cut of your profits. You’re basically paying extra to avoid the annoying parts of running a rental property.
One thing that’s unclear at the moment is how often the building’s investors will actually choose to list their units for rental. If a reasonable percentage of its 249 total units are frequently offered on Airbnb, such a significant increase in rental supply for the area compared to what’s available now could actually drive down prices as the building effectively competes against itself, not to mention the four or five hotel projects currently in the planning stages in the immediate Rainey area.
Then again, Austin’s seen a massive increase in hotel construction over the last five years, and it seems like we’re still filling those rooms just fine — these are just the questions you have to face when you’re introducing a previously-unseen business model. Natiivo’s developers say the building is “50 percent reserved” at this point, so unless you’re planning to buy a unit yourself — at the moment, they’re starting in the $500k’s — we’ll just have to wait and see how this new approach fares in Austin’s growing hospitality market. The building is currently scheduled to open in 2021.