Corporate Housing And Furniture Rental Company

Not Disclosed, MO

Mid South

Asking Price: Annual Revenue:
$5,999,999 $5,300,000

Services: Hotel, Motel, Lodging

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RE: Corporate Housing And Furniture Rental Company Broker: Russell Logan

Quick Facts

Asking Price: $5,999,999
Annual Revenue: $5,300,000
Net Profit: $1,390,000
Cash Flow: Not Disclosed
Total Debt: Not Disclosed
FF&E: Not Disclosed
Real Estate: Not Disclosed
Year Established: 2006
Employees: 22
BBN Listing #: 780360103
Broker Reference #: Not Disclosed

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Business Overview:

2 synergistic companies with 26% Adj EBITDA Margins

In the last few years, $1 billion of capital from strategic investors, PE firms, and venture capital-backed firms have been flowing into the short-term rental (STR) market ecosystem - either through properties, brands, management companies or vendors that provide services to the growing number of STR operators. Some notable investors include Berkshire Hathaway, CEAS Investments, Initialized Capital Management, Soros Fund Management, Airbnb, Comcast, Bowery Capital.

This deal provides a buyer with two companies who have already established themselves in an industry that is attracting significant capital from marquee investors targeting the short-term rental ecosystem. The businesses operate synergistically and provide the combined entity a strategic competitive advantage in the marketplace. The owner’s focus on process and building a strong management team provides stability near term and an offers the ability to scale these businesses into the future as the industry matures.
- Predictable, consistent cashflow; highly efficient operating model and processes with 2020 Adjusted EBITDA margin projected to reach 26%
- Diversified customer base - balanced mix across individuals and commercial clients
- Average Annual Occupancy rate 92.8% over the past 3 years
- Professional, experienced, loyal management team in place and will stay after the acquisition
- Dominant provider in one of the 30 largest markets in the US
- Outstanding growth potential in either the existing market or expansion to other cities
- Favorable local regulatory environment which avoids risk found in operating in other cities which are less amenable to short term rental operators

The first company is a Furnished Corporate Apartment Rental Company. Demand for furnished corporate housing nationally has been strong pre-Covid. The local market where this company operates (major MSA) has a diversified economy which should recover at least as fast as the average major city. This along with continued growth in relocation as people move about for opportunity, the transient/consulting IT Sector for professionals, plus disruption to permanent housing, will drive growth in this local corporate housing market for the foreseeable future.

The second company is an e-commerce Furniture Rental Company. The Company's business model is based on a “warehouse only” concept. This model reduces overhead and expenses which enables them to be very cost competitive compared to traditional showroom-based incumbents. Instead of an expensive showroom with expensive employees, the company leverages the internet to enable customers to make their selections virtually. Ample warehouse space enables them to carry multiple furniture styles and plentiful inventory so they can meet nearly all customer preferences.

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Property Features and Assets:

Entire Building is 40,122 square feet. A tenant has 14,634 square feet, 8,781 square feet warehouse and 5,853 square feet offices/finished space. The businesses occupy 25,488 total square feet. The Furniture Company has 19,446 square feet warehouse, and 6,042 square feet finished space between offices and furniture clearance center. Building is owned and not included in asking price. Furniture inventory $2,000,000 and is included in asking price.

Market Competition and Expansion:

Growth opportunities are to expand geographically to other cities or to other adjacent towns. The furniture company can pursue the explosive growth in demand for rental furniture for home offices as people shift to working from home. Corporate apartments competition is from extended stay hotels plus other local and national short-term rental providers. The companies have an established brand and reputation and compete favorably against all market participants. Currently, the demand for corporate apartments is in flux due to the coronavirus. However, fundamentals in the industry are strong and the business is performing in the range as it did in 2018.

Reason for Selling:

Moving on to new ventures.

Additional Details:

  • The property is owned.
  • The owner is willing to train/assist the new owner.
  • This is not a homebased business opportunity.
  • This is not a franchise resale opportunity.

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