New York–Korman Communities has announced that it will enhance its AKA residences collection by eight to 12 properties over the next five years. The commercial and residential real estate company plans to spend as much as $300 million in each of its designated metropolitan markets to fulfill its goal.
AKA is a collection of upscale, flexible-stay destinations that Korman Communities creates through the conversion of condominium properties in desirable metropolitan locations in the U.S. AKA has attracted a strong following, particularly among entertainment industry players, as well as celebrities. “The combination of our premier locations, great value, spacious suites and amenities is what has created a demand for our flexible-stay residences,” Brad Korman, principal of AKA, tells MHN. “AKA represents great service, value and a flexible lifestyle. Without this combination, the demand would be less. Our existing buildings have high occupancy rates, so the fundamentals are good for growth.”
Presently, the AKA portfolio consists of an aggregate eight assets located in New York City, Philadelphia, White Plains, N.Y., Washington, D.C., and Arlington, Va., a suburb of Washington, D.C. The plan is to expand AKA’s presence in New York and Washington, D.C., and enter the Los Angels and London. “Our AKA properties are in gateway markets, so it makes sense for us to move into London and Los Angeles,” he says. “Our expansion plans are prompted by our current client base. We hear feedback that we need to be in London and L.A. as this is where our clients are traveling for work.”
Korman Communities will peruse any number of existing facilities, including troubled assets, to transform into its new AKA destinations. But the search will not be a walk in the park, despite the availability of properties on the market these days. “It is difficult finding the right properties,” Korman says. “We don’t target distressed necessarily, but rather we look for the right property that fits our criteria. We are extremely selective. We are not just looking for any property but the perfect property with the right style and location, which has always been difficult to find. ”
The hotel industry has suffered through the global financial crisis, and while it is on the road to recovery, most real estate owners and developers are reluctant to open new locations. However, the situation is quite different for AKA. “Our occupancy is back to 2007 levels and rates are up over 20 percent year over year,” Korman notes. “Our AKA model does well despite the economy. Our partners know this and are ready to work with us as we continue looking for new assets.”