Jon Slavet, Sentral CEO, joins Yahoo Finance to discuss how Sentral is reinventing home, expansion plans, and growth.
- The Denver-based real estate startup Sentral is betting that the flexible living trend will stick around long after workers are called back to the office. It currently manages about 3,000 apartments, some of them fully furnished that you can rent for one night or for several years. Joining me now is the CEO of Sentral, Jon Slavet. Jon, good to see you here. So talk to us about how Sentral works exactly, and what cities are you in right now?
JON SLAVET: Well, thanks for having me, Alexis. So our vision is to redefine home. So if you come to sentral.com, you can book any length of stay, as you mentioned from a night to a quarter to more than a year. And essentially, that's the first time that's happened in a network of class-A, premium, urban, best-located multifamily apartment buildings. So that's the essence of the offering. We have proprietary technology that enables that flexible booking engine, and on the backend enables us to flexibly manage that inventory, essentially all of our apartment homes, to offer flexibility to the customer, optimize revenue for the owner. And that drives the whole Sentral business model.
We're operating in seven gateway cities in the US, from the West Coast-- Seattle, Los Angeles-- all the way to the East Coast in Miami. But we have plans and ambitions to grow in a fairly dramatic fashion over the coming quarters and years.
- Yeah, I know you're going to be opening, or maybe you just did open, a building in Atlanta. Talk to us about that particular space. And also, are there plans to go international with this?
JON SLAVET: Yeah, Atlanta is coming soon. West Midtown is a thriving, very cool neighborhood. Star Metals is the community that we're just about to take over and launch. So Atlanta's the newest addition to the platform. We have many other gateway cities in our sights. You can expect to see us in many of the NFL cities over the coming quarters and years.
- So are you going to be purchasing these buildings? Will this growth happen through acquisitions? I know that ICONIQ Capital is a major investor, and sort of the money arm behind Sentral. Talk to us a little bit about how you're going to expand.
JON SLAVET: Sure. It's going to be through a mix of acquisition and third-party growth. The majority of the growth over time will be through partnerships with third-party owners who want to enhance the flexibility of their asset, and obviously increase the net operating income of their asset. So it's a hybrid strategy.
The reason we started with the investor group that we have that includes, as you mentioned, ICONIQ Capital, includes Ascendant Capital, the real estate investment firm, Bozzuto Homes, one of the leading owner-operators of apartment buildings, and Highgate, the legendary hotel management company, we put this group together that brings industry knowledge, talent, expertise, distribution, and we created the Sentral proptech platform that drives any length of stay, all of the IP, the IoT that goes into the buildings, the brand standards. We married that with our first real estate, these 10 locations in seven gateway cities because the ultimate way to launch this business is to be an owner-operator, because ultimately, we succeed when owners succeed. And so the majority of growth will be through third-party deals, but we'll continue to acquire, as well.
- You know, there are some out there, I'm sure you're aware, who are questioning the sticking power of this trend beyond the work from home error. They say that, you know, housing that caters to both short and long-term renters can be expensive to operate. How are you going to offset those higher costs?
JON SLAVET: Hm. Well, Sentral is a capital-light business model. So Sentral is a proptech platform, essentially. So the aspects of Sentral are the technology that I mentioned, the flexible booking engine, the IoT standards to make these buildings contactless to access and enter, our brand standards. So Sentral is very capital-light. You know, the real estate growth, again, will largely come through third-party deals with owners. And so the model's extremely scalable.
In terms of the market, you mentioning that we're getting back to the office, the benefit of the Sentral business model is it provides flexibility. So you're going to have a certain percentage of the community that's staying long-term. You're going to have a significant minority that is living flexibly or coming in for a few nights. So that mix is the product mix that a modern multifamily asset needs to be responsible to the market, but it's very stable and solid from an ownership perspective because you have diversification of lengths of stay. And we think that's the future.
- All right. Jon Slavet, CEO of Sentral, best of luck with the expansion plans. Thanks for being with us.