A historic mansion for $6,000 a night, a yacht for $750 a night or a lakefront home for $5,500 a night, including a private chef and boat with captain.
All are advertising themselves as places to stay when the Ryder Cup comes to Chaska in September and the Super Bowl comes to Minneapolis in two years.
Across the metro area, ordinary homeowners are thinking about whether to cash in on the action. They’re watching rentals this week in the San Francisco Bay Area, where the 2016 Super Bowl takes place next Sunday, for clues about demand.
“The opportunities are going to be huge,” said Luke Kleckner, a real estate agent who says the Super Bowl has helped him sell condos in a new tower just a few blocks from U.S. Bank Stadium. “There’s just so much corporate money coming into the city. Some of these folks have a blank check and they’ll pay just about anything for what they want.”
While the Bay Area gave birth to the home-rental phenomenon and Phoenix, which hosted the Super Bowl last year, is a popular snowbird haven, the Twin Cities is relatively inexperienced when it comes to the vacation-home market, because, well — winter.
But that could change as the region hosts big sports events in the next few years. There are only about 40,000 hotel rooms in the Twin Cities area, far below the 100,000 in Greater New York City, which hosted the Super Bowl two years ago. Downtown Minneapolis has just 7,500, with about 1,500 to be added in the next two years, according to Meet Minneapolis, the city’s convention and tourism association.
More than 125,000 out-of-town visitors are expected Super Bowl weekend, and the NFL will reserve 19,000 rooms for teams, officials, sponsors, staff and media. The result is likely to be lots of opportunity for home rentals.
“You’ve got this urban stadium and people will want to stay near there if they want to be where things are going on,” said Ian McHenry, co-founder of Beyond Pricing, a San Francisco-based company that helps people price their homes for short-term rentals. “Looking at the number of hotel rooms that’s in the area, which is incredibly low, and looking at how close everything is to each other, short-term rentals are ripe to go up a lot.”
There are two types of guests, he said, for major events: a typical traveler who is there for the game or surrounding festivities, and wealthy corporate attendees. The first type might pay a slightly higher rate for a house while the second category is willing to pay premium rates for a high-end residence near the event site.
“They want fancy high-end villas,” said McHenry. “If I were a betting man, I’d say this is one of those cases where you could get a lot for that type of Airbnb.”
Some of the most desirable spots for the 2018 Super Bowl — the apartments and condos in downtown Minneapolis — may not be available for visitors because of rules set by landlords and condo boards. But with U.S. Bank Stadium also hosting the Final Four in 2019, and the growing acceptance of house-sharing services like Airbnb, the pressure to change such rules is growing.
‘Impossible to say no’
Based on what’s happening in San Francisco, Kleckner says that a modest condo in downtown Minneapolis could go for $2,000 to $4,000 a night during the 2018 Super Bowl period. Larger units with views might get $6,000 a night, he said. The typical rental length is likely to be three to 14 nights, creating the possibility of a nearly $30,000 windfall for some. “It’s going to be impossible for them to say no to that,” Kleckner said.
At the Bridgewater, a Mill District condo building two blocks from the stadium, residents formed a task force nearly a year ago to address the issue. “Our thought is that it’s going to happen anyway, so let’s get out ahead of it and let’s put down some rules and put some controls in place,” said David Tinjum, a Bridgewater resident who’s on the building’s Super Bowl marketing and public relations committee.
Bridgewater, which has nearly 300 units, has a broad range of renters, including many young professionals and retirees who might be tempted by the income.
In a survey, about 75 percent of them voted in favor of allowing short-term rentals for big events. And the condo’s special committee is talking with major TV networks about renting its sprawling top-floor community room, which has a 30-foot ceiling and huge windows overlooking the stadium.
Several new apartment buildings are drawing a line, however.
Jane Sorman, property manager for Lincoln Property Co. at 4Marq, downtown’s newest luxury apartment tower, said the firm patrols home-rental and sharing websites to be sure its renters aren’t trying to capitalize on their unit. Violators will be breaking the law, said Jennifer Gordon, senior vice president of Excelsior Group, which is co-developing the Edition apartments now under construction a block from the football stadium.
“We don’t hand out keys to just anyone, and we don’t allow subleasing,” Gordon said. “So legally, you can’t do it. You don’t own the apartment, we do.”
Corporate housing providers, which offer short-term furnished apartments, are ramping up for the Super Bowl and other events. Oakwood Worldwide, which manages 500 short-term rentals in the Twin Cities, says it is negotiating with local landlords to have more that it can offer during major events.
The Twin Cities lodging market will get stretched this September when the Ryder Cup comes to Chaska. The six-day golf event draws 40,000 fans a day, but the overall number of visitors is difficult to pin down. Most tickets for the event are sold for all six days. “Some people will use the ticket to attend all days and some will not,” said Brent Foerster, a senior vice president at Meet Minneapolis.
With fewer hotels in the southwestern suburbs, visitors will spread out around the region, creating opportunities for homeowners willing to rent space.
Renee Frensko of Chaska normally only rents a single room in her house for $45 a night via Airbnb. After going to a community presentation about the Ryder Cup last year, she has listed her entire home for $8,000 for the week of tournament. “Because I was already doing Airbnb, I decided to add another listing for the whole house,” she said.
McHenry of Beyond Pricing said there’s a pattern to how home-rental listings occur in cities that host big major events. About a half year before the event, media reports of sky-high home rental rates spur others to list their homes, which floods the market and dilutes pricing.
“That creates a supply bubble that doesn’t actually get filled,” McHenry said.