Porter Ranch gas leak highlights corporate housing segment

Porter Ranch

The Porter Ranch gas leak crisis displaced thousands of families during the past few months, with many staying at local area hotels. While it's been a big boon to the local hotel industry -- many area hotels are housing as many as 100 families each – it’s bringing lots of attention to the burgeoning furnished apartments business. For many it’s coming into focus for the very first time and is highlighting the viability of this little-known hospitality sector.

Once an obscure corner of the industry, companies such as BridgestreetGlobal Hospitality and WaterWalk Apartments are gaining traction and introducing this business to many in the hotel industry.

But for many families in southern California, these apartments turned into lifesaving locations that helped foster a sense of normalcy during an incredibly difficult time for one community.

“Many families were being denied accommodations because there simply wasn’t enough hotel availability. We had to help, and help these families quick,” said Javier Cepeda, regional VP, Level Furnished Living, of the crisis causing the Porter Ranch families to temporarily abandon their homes in December 2015. “We were conscious of what they were going through and helped as much as we could.”

Cepeda said the company tried to make the process seamless by working in concert with insurance companies, leading to many displaced families taking up residence in the company’s $200 million, 33-story tower. That project debuted in June 2015 with one-, two- and three-bedroom fully furnished suites.

Before the Porter Ranch gas leak, which has been called one of the worst natural disasters in U.S. history, the building housed about 140 families after a severe flood. By the time they were moving out, Level Furnished Living was welcoming and giving respite to displaced Porter Ranch families.

The leak was permanently sealed on Feb. 18, but various legal maneuverings are keeping many families displaced for a while longer.  

According to The Highland Group and the Corporate Housing Providers Association, U.S. corporate housing room revenue was $2.73 billion in 2014, a 4-percent jump from 2013. There are more than 61,000 U.S. furnished apartment rental units in this market, with an occupancy of 88.6-percent and a length of stay at an incredible 96 nights, said the report. Numbers representing 2015 have yet to be released, but are due imminently. U.S.-based corporate housing ADR was $136.90 in 2014.

The Canadian corporate housing industry generated room revenues estimated at $269 million in 2014, an increase of 2.9 percent from 2013. Overall, the Canadian industry is significantly larger than annual revenues currently indicate, said the report. ADR in Canada is estimated at $122.65.

Meanwhile, NMS Properties’ EVP, Dino Ciarmoli, another recently created corporate housing provider, said they too played a significant role in helping Porter Ranch families.

“Because of this crisis befalling residents, we reached out to the community through traditional advertising and social media, and got an immediate response. It’s been a win-win for everyone involved,” said Ciarmoli. “It is horrible what these families have been going through. We just can’t imagine upending their lives like this.”

Both places say many of the guests are still in residence, though mostly all will be out by the end of the month after staying between two and three months.

Cepeda said he was happy their company was able to give a helping hand to the community.

“Some guests may have felt uneasy because of the situation, but we tried to make it as much as home as possible for them,” said Cepeda, noting many families had visitors and had BBQs and for the most part tried to get on with their lives.