One of the most challenging aspects of moving to a new city for employment or education can be finding housing accommodations. Identifying a community within a preferred budget, exacerbated by tight markets that have been heavily hit by the COVID-19 pandemic, seems to be a more difficult feat than ever. Tech-driven residential property operator Tripalink, however, is forging a path in the greater Seattle area to combat these challenges and help students and working professionals find a home and a community, particularly through their recent acquisition of property management company Keystone Properties Northwest.
“In terms of growth and the potential on the West Coast, we think Seattle is definitely the most potential city,” said Vicky Zhou, regional manager for the Seattle market at Tripalink. “With a lot of big companies and all the growth and all the young professionals with high paying jobs, we think it’s a very good market for the multifamily and young professional apartment industry.”
Launched in 2016, Tripalink is a venture-backed residential property operator headquartered in Los Angeles, California. Driven by technology and data, they have expanded their strategy in the past five years to include property offerings for students and working professionals in major urban markets all over the United States, including Irvine, Philadelphia, Pittsburgh, Tucson, Austin and San Francisco. They operate more than 6,000 beds in the United States, with an additional 8,000 beds to be signed by year’s end and a target portfolio goal of 10,000 beds under management by 2022.
“We always go to the cities that have both students and working professionals,” said Sophia Ye, marketing director at Tripalink. “When they’re in school and as a student they can live in student housing and student co-living properties, and when they graduate, they can move to standard apartments or young professional co-living spaces.”
Tripalink first noticed the Seattle market when many of their Los Angeles-based tenants were leaving the city to spend a summer in Seattle for internships, or to begin full-time work.
“They were asking us, ‘Do you have properties in Seattle? That would be great,’” Ye said. “We thought it would be a great opportunity to extend our customer lifetime value.”
Though Seattle is a competitive market, Tripalink recognized that it fit their expansion strategy well since it has a high population of both students and working professionals. After opening their Seattle office in early 2019, they quickly expanded to include properties in the student-populated U-District. When the COVID-19 pandemic hit the market in early 2020, Tripalink’s office remained open and responsive to tenants, and they managed to maintain a 98 percent occupancy rate during the first year of the pandemic.
“That brought up our reputation and ownership,” Zhou said. “All the brokers and property owners started knowing about us. We got a lot of property owners reaching out to us saying ‘Hey, I have a building that’s 50 percent vacant. Would you be interested in managing that?’”
It was during this time that Tripalink encountered their first Keystone client, and through working with that client, they got to know more about Keystone Properties.
“In my opinion, they’re one of the best smaller-sized property management companies in the Seattle area,” Zhou said.
They realized that Keystone Properties target customer audience was nearly 80 percent similar to Tripalink’s, and that the two companies shared a similar vision for residents, particularly as it related to student residents.
“Eventually we’re either in the same market competing with each other, or we can acquire Keystone Properties and we can work together since we share the same vision about providing better rental experiences for all the residents, especially student residents,” Zhou said.
Similar to other property management companies, Keystone Properties had lower occupancy rates during the peak of the pandemic, and their profit was affected. Realizing that the two companies could benefit from an acquisition, the Tripalink team began meeting with more Keystone clients, as well as the owner of Keystone, to find out more about the company’s framework, vision and goals. Then, Tripalink chief executive officer Donghao Li and the acquisition team flew from Los Angeles to Seattle to try and close the deal. According to Zhou, the whole process took about five months, from the original client contact to closing the deal, and Tripalink officially acquired Keystone Properties in August 2021.
“The more we got to know Keystone, we realized it’s a very good company,” Zhou said. “[It’s] structured, organized [and] all the staff are amazing.”
With the acquisition of Keystone Properties, Tripalink has been able to expand their strategy beyond the U-District to the downtown Seattle market, opening the door for more working professional tenants. With Keystone’s 14 properties, which total 628 units, Tripalink manages nearly 1,100 units in the Greater Seattle area, including properties in West Seattle and Ballard.
“Acquiring Keystone is a great step for us to grow our portfolio and expand into the downtown Seattle market,” Ye said. “That helped us expand into the working professionals market…Seattle right now has become our second largest market after Los Angeles.”
Tripalink and Keystone Properties share common values and remain focused on the tenant. Prior to the acquisition, they both offered welcome gifts for tenants, as well as events to try and encourage tenants to get to know one another and build a community. Both companies also had relatively younger staff, in comparison with other property management companies.
“They’re not mid-30s or 40s, they’re around mid-20s and early 30s,” Zhou said. “We’re more connected to the students and young professionals who just got their first job. In this sense, we felt like being able to provide our residents the best living experience and also be able to give back to the community is very important for both Tripalink and Keystone.”
Both Keystone Properties and Tripalink are benefiting financially from the acquisition, as well. Prior to merging together, Keystone Properties was affected by the pandemic and suffered from lower occupancy rates. Now, their finances are similar to how they were before the pandemic. While revenue is important for Tripalink, as well, they are also looking to expand their portfolio and reputation so they can raise more funds. Tripalink closed its Series B funding in fall 2021 and is looking to do more fundraising in early 2022.
“Acquiring Keystone is a very good stepping stone to raise another funding, and will eventually help us go public in the next 3-5 years,” Zhou said. “That’s the big goal for our company.”
Tripalink is also working on an app where tenants will be able to take virtual tours of properties, sign leases, pay rent, submit to requests and RSVP to community events, all with the ease of a few clicks.
“We try to build a residential brand in this market, driven by technology,” Ye said. “We believe that can not only improve the tenants’ living experience, but also improve overall occupancy and operation efficiency.”