Jesse Stein, Airbnb’s Global Real Estate Head, On Multifamily Partnerships
The tech giant has teamed with similarly larger outfits such as Greystar and Equity Residential to expand Airbnb's reach
Airbnb started in 2008 when two of its co-founders, Brian Chesky and Joe Gebbia, couldn’t afford their San Francisco rent.
To raise some quick cash, the duo took advantage of a designers conference that was coming to town. Hotels were scarce and expensive, and the roommates had the simple idea to rent their loft — complete with three air mattresses — to young attendees who hadn’t been lucky enough to secure lodging. Fast-forward to January 2023, and Airbnb has a market cap of $56.17 billion and is a household name — as well as being both a verb and a noun.
Under Jesse Stein, Airbnb’s head of global real estate, the company just launched its Airbnb-Friendly Apartments program, partnering with multi-
family titans the country over — think Greystar, Equity Residential (EQR) — to help potential residents identify buildings that will allow them to list their apartments on Airbnb and — just like Chesky and Gebbia — make some extra bucks. The landlords, for their part in the deal, get residents, and also up to 20 percent of the total booking revenue from Airbnb.
The program’s rollout comes at a critical time when cost of living is top of mind and a recession appears imminent. Commercial Observer sat with Stein to learn more.
This interview has been edited for length and clarity.
Commercial Observer: You joined Airbnb in January 2020 — just before the world came to a screeching halt. What was your motivation?
Jesse Stein: The world was changing before COVID, and that was actually the premise behind my motivation. People were living more flexibly, and there was a finite amount of development. Historically, there was multifamily or single-
family housing, and there were hotels. I had worked in the hotel industry for many years where we made our money on nights when there was compression in a market — a convention, New Year’s Eve, whatever the occasion may be —and that’s how you created profit for the most part. Airbnb had really changed the game before I joined by asking, “Why does there need to be two separate asset classes?” Theoretically, one can host guests in their primary home when there is compression, and accommodate the demand of those compression nights for the consumer. That was really the impetus for me to move, because I felt Airbnb was best suited to lead this revolution.
So, I left a really great job in private equity running investments for a group called KHP Capital — which was Kimpton Hotels previously — to jump over to tech, and then all of a sudden Rome starts burning within the first week. It was an interesting transition to say the least, and one that I was personally a little concerned about. But, at the end of the day, it all worked out and I’m very, very blessed to be here.
What was your initial focus at Airbnb?
When I first joined, Airbnb had a lot of ideas on how to grow, and was looking to get more into the real estate business. Within the first couple of weeks, I had to have the really tough conversation internally that we’re an asset-light company, and not an acquirer of real estate. I felt that owning real estate wasn’t the best way to unlock the most value for our investors or for our consumers, and that we needed to come up with creative ways to partner with both individuals and companies that own real estate. That way, we could create incremental value for our partners, as well as economic value for the individuals that live in our partners’ buildings, and really unlock the ability for more individuals to host and obtain the economic benefits of Airbnb.
So, I tried to come up with a product that could create a ton of value and one we could scale faster with more partners by bringing those partners to the table with us. That’s what led up to the market-
place we just launched, “Airbnb-Friendly Apartments.”
The program helps renters identify specific buildings that allow Airbnb listings, sign long-term leases with the multifamily giants you’ve partnered with — including Equity Residential and Greystar — and then list their units on Airbnb. How did this program come about?
It’s been a couple of years in the making. I started with Airbnb roughly three years ago, and within a few months of starting it was clear — given indications from our consumers and the partners — what the opportunity was, and that was to create a marketplace for renters to find homes that both encouraged and supported hosting. It seems like a simple opportunity, but there are so many complexities when it comes to working with multiple owners of real estate in all of the various markets we’ve launched in. It ultimately came about through conversations with Greystar, and with our other partners, and also with our consumer base. We were getting emails and calls every single day saying, “I’m a renter in X market. Which buildings will allow me to host?” And, so, we were getting that constant feedback.
We were also looking at the cost of living today. Rentals comprise 35 percent of the housing stock, but the majority don’t allow residents to host — even though people are working more remotely now and need more flexibility.
An Airbnb-friendly buildings program was actually launched years ago, but there’s a big shift in this new marketplace in driving top-of-funnel demand to our real estate partners from our customer base that wants to find places to host.
Why did you think the partnership approach would be a better fit rather than owning real estate outright?
At Kimpton Hotels, we had a private equity fund and we also had an operating company, so we were out doing third-party management contracts with large institutional investors, as well as investing our own capital. The one question that always came to mind when I was competing with Brookfield or Starwood or whomever was: “Why would we hire you to run the business when you’re also bidding against us?” I would rather look at real estate investors as partners, not as competitors.
When you think about what Airbnb really does, it gives average individuals the ability to host their most costly asset and to monetize it when they’re not there. The more and more we can do to unlock that ability for more people is exactly what we’re focused on. So we’re focused on scaling with our residential partners today and unlocking the ability to host, and then also looking at other asset classes in the future.
We did a deal with the Related Group in Florida for the first Airbnb-branded condo building [District 225] last year. But, generally, right now, we’re focused on multifamily.
Are you actively adding more multi-
family owners to your list of partners?
Every day. We’re actively adding properties every day, every week, every month, and we are trying to eventually scale to all the markets that we can play in.
Speaking of cost of living, Airbnb listings are found in some of the U.S.’s most expensive cities, such as San Francisco and New York City— the latter of which is mulling a new short-term rental registration law that could remove those listings from the market. How do you approach market-specific challenges today?
I look at them more as an opportunity. The program that we’re rolling out is for individuals hosting their primary homes on a part-time basis. Our goal isn’t to take away housing stock. We want to work with cities on laws that make sense for everybody. We would love the opportunity to work with New York, as well as other markets, to unlock this ability because we think it’s a real opportunity for cities to make their communities more affordable. That’s our belief, and so we look at it as an opportunity, not as a challenge.
Each market ultimately has its own challenges, and opportunities, of course. I think the philosophical thread between all markets and Airbnb is we’re all trying to make housing more affordable, and we believe hosting is one of the ways to do that. Obviously, one of the other challenges with housing in general is there just isn’t enough housing, so we’re big believers in adding incremental housing, and we support the majority of housing development. But this opportunity, we think, is global in that it’s somebody’s primary home, you’re not doing this as a side hustle and taking out seven units of housing stock. This program is really catered to giving individuals the ability to host and providing an economic benefit to make housing more affordable across the globe.
Airbnb was founded during the Global Financial Crisis, and today we’re faced with an impending recession. Do you see the company’s core mission as coming full circle today?
Airbnb started with this exact model. It wasn’t Brian Chesky and Joe Gebbia trying to create a side hustle, it was them trying to pay their rent. They saw an opportunity and acted on it. And so, yes, I think this is really coming back to the core of Airbnb and unlocking the ability for more people to do the same.
We’re focused on unlocking the ability for renters to host in order to keep up with the cost of inflation, and I don’t think that ever changes. Our marketplace provides our partners an opportunity to make their buildings more attractive to individuals that are struggling to keep up with the cost of living, and, for the renter, it’s an opportunity to take advantage of the economic benefits of hosting on Airbnb.
How did your career path before Airbnb prepare you for your role today?
My previous career only happened because I failed in my dream to be a professional
athlete [laughs]. I played football in college, and then had a cup of coffee in the pros with the Jacksonville Jaguars, then I got cut. Like a lot of kids growing up, you do something
your entire life and you work every day from when you’re 3 years old until 22 trying to do something, and then it all comes crumbling down.
I majored in real estate finance, but I always had a passion for travel. I interned for Starwood Hotels in college, in the vacation ownership division, and, when I got cut from the Jaguars, the gentleman I interned for offered me a job as a financial analyst. So I started my career as a financial analyst, grinding numbers from 7 a.m. till 1 a.m.
I was at Starwood for seven years; then the recession hit, and, unfortunately, I was like a lot of folks and I was on the outside looking in. I ended up getting into the hotel business a couple of years later and also got married. I had a startup in Central America at that point and my wife said, “I’m not moving to Central America.” So I started in franchise sales with Wyndham, then made my way to Kimpton.
We had a private equity arm, so I was in charge of investing on behalf of our investors, endowments mostly, as well as growing our third-party management business with large institutions. So it was really a great learning experience because I got to invest in the underlying real estate and understand the data, as well as working with the largest investors in the world and understanding what made them tick.
What was also interesting is, towards the end, every deal I would do I would always look at Airbnb data. I made a bunch of investment theses based on Airbnb, going really heavily into markets where Airbnb wasn’t. Outside of the flexible living movement pre-COVID, I was also of the opinion “If you can’t beat them, join them.”
So, my experience throughout my career — from sports, to franchise sales, to starting my own startup in Central America, to leading investments for a private equity company — has all led me to Airbnb, and rounded out my thought process in taking into account all stakeholders, because at Airbnb, we want to ensure that the products we release work for everybody, not just one constituency. All ships rise with the tide, if you will.
What’s your favorite part of the job?
I think it’s really the challenge that comes with creating value for all individuals. We’re basically a startup within a $60 billion company. My team is roughly 55 individuals, and we’re this little strategy group underneath Nate [Blecharczyk], one of the founders. So, we have a startup mentality within a larger company.
Airbnb has around 6 million-plus active listings across the globe, but this is the first time that we’ve really made a conscious effort to partner with Greystar, Brookfield, Equity Residential and others, so all the different things we have to do both externally and internally is really fun. We’re creating a new business within the business. I’m tired, and I bang my head against the wall 100 times a day, but I absolutely love it. I’m excited to come to work every day.
When you travel for work, do you stay in Airbnb? Or do you stay in hotels?
The majority of the time I stay in an Airbnb because the majority of the time I’m going to urban locations to visit our partners. I actually love staying in our partners’ buildings. I just stayed in a Greystar building in Dallas and it was such a great experience. They have breakfast tacos in the morning, which were pretty amazing [laughs].
Do you have a favorite Airbnb you’ve stayed in?
Which kid of mine is my favorite, you mean [laughs]? That’s a really hard question that I can’t answer.
Cathy Cunningham can be reached at email@example.com.