As Vacasa snaps up property management companies, it’s also creating an ecosystem of secondary service offerings that have come with the acquisitions, most recently launching multifamily management and community association management programs. These services follow the addition of a real estate arm this summer.
The company announced its community association management program earlier this month but has been building it since February following the acquisition of Accommodation Services and its two community management contracts in McCall, Idaho. Today, Vacasa manages 16 associations across Idaho, Utah, Colorado, and Costa Rica. The company also provides property management services for 66 short-term rentals within these associations.
Led by COO Bob Milne and Meghan Lutterman, director of homeowner associations, the program provides association boards of directors with governance and state and local law compliance, onsite management of community areas, and optional accounting services. They are looking to expand the program to communities around the country with high concentrations of short-term rentals, currently focusing most on the Florida Keys and Panhandle.
“Our goal is to support individual community association managers and homeowner associations by understanding the unique needs of having short-term rentals within communities,” Lutterman said. “Our hope is to become the short-term rental manager of choice for each association.”
Days after the community association management program announcement, Vacasa announced its multifamily program which partners with developers and multifamily property managers to fill vacant units with short-term rentals. The program marks further injection into urban markets following its high-profile October acquisition of Oasis Collections, an urban short-term rental company with previous investments from Hyatt and AccorHotels, as well as its 2017 purchase of apartment and condo rental complex Chicago Premier Suites and a similar company in Boston.
“Within [these acquisitions,] we realized we have a portfolio growing in urban markets that’s different in a number of subtle ways that requires its own management,” said Josh Viner, senior manager of multifamily for Vacasa. His team has to think differently about things like elevator access, building security, noise, and other good neighbor practices, and other factors determined by the units’ proximity to the community. Vacasa works with NoiseAware, Point Central, and Virtual Key in its multifamily properties.
The program currently operates in Boise, Chicago, Dallas, Houston, Portland, San Antonio, and Seattle with 150 total rental units. “There are a number of other markets we’re exploring, but [Vacasa founder and CEO Eric Breon] is hesitant to commit ourselves to new markets in the late stage of a bull market,” Viner said. “We’re taking a very measured approach to this segment.”
The program’s expansion will also be limited by regulations. The regulatory landscape around the US has been changing rapidly in recent years, most often with ordinances that severely restrict or ban short-term rentals in popular urban travel destinations. One such destination is Boston, where Vacasa is currently moving its multifamily operation out of the city.
“Regulations coming into play is something we take seriously,” Viner said. The company joined the National Multifamily Housing Council to work with them on creating sensible legislation for short-term rentals.
In cities and neighborhoods where regulations are favorable, Viner and his team look for buildings with a 6 to 8 percent vacancy range that allow corporate rentals and are interested in providing short-term rental opportunities to tenants and their families as well as Vacasa guests. The company also wants to partner with developers on purpose-built complexes.
“Our mark on this space is long-term stability,” said Colin Carvey, senior vice president of growth. He said the multifamily program will be only 5 to 10 percent of Vacasa’s total business, an augment to its core property management service and a diversification of the portfolio to reduce risk.
Adding so many programs in parallel to property management has some wondering if Vacasa can be all things to all people, particularly in community association management.
“It’s often times a thankless position and can be extremely difficult,” said Ben Edwards, president of Weatherby Consulting. Edwards owned and operated an association management company with more than 2,000 properties under management. “I see the opportunity that they do, but I am concerned that the investment may not generate the proper return.”
Jim Olin, CEO and founder of C2G Advisors, agreed. Olin has worked in community association management in various roles for decades. Vacasa is going into a whole other industry, a pretty significant strategic pivot for them, he said. The move will give them exposure to all owners in a development, which could present conflicts of interests and a risk of losing short-term rental units with a mistake at the association level. “They want to be careful not to boil the ocean,” he said.