As I write this week’s column, I am sitting in a warehouse on Fretz Ave in downtown Edmond supervising the sale of entire households of furniture, appliances, rugs, dcor, art, dishes, utensils, fixtures, linens, and other necessities one finds in a typical short-term rental (STR). We have recently converted several STRs to long-term rentals. We continue to operate a few STRs serving very specific markets, but we have limited our STR activity significantly.
We have been in the STR business for over 20 years with a property in Red River, NM. About 10 years ago, we expanded into the Grand Lake area and about seven years ago, we started exploring STRs in the downtown Edmond market. In the past, we operated in two specifically different markets. Red River and Grand Lake are clearly resort areas, catering to tourists on vacations and recreation. When we entered the Edmond market, we were catering to a very different market. I felt like the downtown area was unique enough that it would eventually attract vacationers and recreational clientele similar to Red River and Grand Lake, but it might take a few years. We committed to the STR model, assuming that the demographic would have more disposable income and boost sales for aspiring retail commercial businesses in the downtown area, therefore benefitting commercial real estate owners and business owners alike.
We bought historic properties, remodeled them, decorated them with unique themes, and launched the STR business in downtown Edmond. Our properties performed well; however, the demand came primarily from local residents who found themselves homeless because of selling their homes, remodeling their homes, or unfortunate circumstances due to disaster. There was some demand from parents of graduating UCO students, grandparents attending grandkids events, consultants working in nearby businesses, and youth athletic teams for soccer, baseball, and such. Rarely, did we host those purely visiting as tourist or recreational purposes.
The downside to the STR proposition is that it can limit needed housing for young or income-challenged neighbors. I suppose it can also have an effect on community-building efforts because of the transient nature of guests. The positive effects to the community are sales and activity for local retail markets with clientele that has more disposable income.
It was a great run. We did well. We are now proud to welcome a new demographic that will be committed to building community in downtown Edmond. Welcome!
J. David Chapman is professor of finance & real estate at The University of Central Oklahoma (jchapman7@uco.edu).
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