A Vacation Rental Company You’ve Never Heard Of is Driving Some Major Projects Downtown

We never really want to leave the comforts of Philadelphia, but still find ourselves going on the occasional vacation. And when planning a trip, a major decision point is whether a hotel or an Airbnb is the right choice in terms of accommodations. This decision-making process has become so second nature, one can easily forget that Airbnb wasn’t even a thing until about a decade ago. For anyone who hasn’t stayed in one before, Airbnb is generally awesome. Getting an Airbnb often comes with certain benefits, including more space, a better location compared to hotels, and lower prices (assuming the Pope isn’t coming to town). But Airbnb can also be unpredictable- after all, most of the units are someone’s personal home and people’s homes can be a little or a lot gross.

Not surprisingly, companies have sprung into existence to professionalize the Airbnb experience, essentially turning Airbnbs into de facto hotel rooms. A business called Sonder is taking that approach one step further, cutting out the middle man. Sonder leases blocs of apartments in a couple dozen cities, furnishes them, and re-leases them as short term rentals. Already, Sonder has leased units in Philadelphia at Liberty Place, 1600 Callowhill, the townhouses at the Alexander, and the Witherspoon Building. For their next couple Philadelphia properties though, there’s a lot of work still to come.

Wendy's at 11th & Walnut
Parking garage is on the right

A Philadelphia Business Journal story from a couple weeks ago shared the news that Sonder would be leasing space at 1101 Walnut St. and 1620 Sansom St., in buildings that don’t currently exist. 1101 Walnut St. is a Wendy’s which we profiled last fall, providing some history about the one-story building and speculating that it would eventually sell to developers with an eye toward redevelopment. Wouldn’t you know it, developers bought the property for $5M back in April and now Sonder will be leasing 111 units in a building that hasn’t even gone through permitting yet.

The situation at 11th & Walnut is incredibly straightforward, compared to the property on Sansom Street. The south side of this block is dominated by a stocky parking garage which has a few strong retail tenants on its first floor, including a Federal Donuts location. Yet the PBJ story indicates that Sonder will be leasing 207 units in a building at this location. A thread on Skyscraper page wonders whether this will mean the demolition of the garage or the addition of a few residential stories atop the existing building and either seems possible. Whichever approach is taken, we have to imagine that this construction will have a significant impact on the retail tenants.

Considering the size of these two projects and their prominent locations, we have to think we’ll hear more information about both projects in the near future. Details notwithstanding, we’re pleased and totally unsurprised to learn that a couple of underused Center City properties will be stretching toward a higher and better use in the coming years. You could argue that it would be better for permanent residents to occupy these units and not tourists, but the beauty of the Sonder model is that the units could always transition to regular apartments in the future. But if these deals prove successful and both buildings are regularly packed with tourists, look for Sonder to lease more and more units around town.