AvantStay Secures $500 Million PropCo Fund in Partnership
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Feb 16, 2022, 17:48 ET
Company's Half Billion Raise Signifies One of the First Short-Term Rental Funds Ever
LOS ANGELES, Feb. 16, 2022 /PRNewswire/ -- AvantStay, the premier hospitality platform that is redefining the way in which people travel, transact and invest in the STR (Short-Term Rental) industry, today announced the closing of a $500 million PropCo funding round led by Saluda Grade, a real estate advisory and asset management firm. This raise signifies one of the first short-term rental funds ever created, leading to the institutionalization of a new real estate asset class within the short-term rental industry.
"AvantStay continues to break barriers for the STR industry. With this new capital and partnership with Saluda Grade, we will pioneer and institutionalize a new asset class that will inevitably pave the path for travelers to have a better experience and for investors to generate attractive returns," said Sean Breuner, CEO and Founder of AvantStay. "I couldn't be prouder of the entire team for what we've achieved over the last few months, as this news follows our Series B announcement in December. Our accelerated growth shows there is a deep understanding of our offering. With Saluda Grade as an instrumental partner, we will continue to deliver our brand mission and provide guests with thoughtful and elevated experiences."
As part of Saluda Grade's drive to identify alternative lending sectors needing institutional capital to fuel growth, the company has secured twelve securitizations worth over $2 billion this past year, which consist of single and multifamily housing nontraditional debt securitizations. AvantStay's PropCo fund serves as the company's first foray into the STR industry and its first securitization in the asset class. Saluda Grade was also an investor in AvantStay's recent Series B fundraise of $160 million announced in late 2021.
"We believe AvantStay's dynamic and fast-growing customer base makes them the perfect partner for our firm to finally enter the burgeoning STR space," said Ryan Craft, Founder & CEO of Saluda Grade. "We were attracted to their higher yielding product and differentiated channels of supply, and we are confident they will continue to lead the industry with their robust offering of hospitality, tech, design and real estate as an all-in-one package."
Securing an institutional PropCo investment from Saluda Grade further allows AvantStay to set a new precedent for best practices with local communities and their governing bodies. Investors, operators and regulators across the industry have recognized that premier brands and professional operators ensure the successful partnership of short-term rentals and local communities for the long term. "AvantStay's focus on engagement with local communities and compliance with their regulations empowers the communities to extract maximum benefit from tax revenue, direct and indirect employment growth, as well as tourism dollars directed towards local small businesses," said Fiona Quinn, Senior Vice President of Business Affairs of AvantStay. "Our investment in our proprietary operating and experience-first platform protects community character. Our partnerships with local regulators and community groups keep us accountable to the highest standards of operations and ensure that AvantStay's growth plans align with those of our communities."
As a result of this investment and partnership with Saluda Grade, AvantStay will deepen its portfolio and further expand into new markets across the country. The company's goal is to manage the largest luxury home portfolio in the country, while delivering a highly curated and personalized short-term rental experience. Currently, AvantStay has over 1,000 vacation rental homes in more than 100 cities in the U.S. and Cabo San Lucas, supported by dozens of partnerships with companies such as GoPuff, Soothe and Public Goods. In 2021, the company was ranked 2nd fastest growing hospitality company and 332nd fastest growing company on the Inc. 5000 list, which showcases the nation's fastest-growing private businesses.
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