Lobie: meet the Rio startup that transforms hotels into residential properties

By Hugo Cilo

The real estate market in the capital of Rio de Janeiro has undergone an unprecedented transformation in recent years. From luxurious apartments in new areas in Barra da Tijuca to run-down buildings in the city center, the sector is experiencing a rush of large projects and substantial investments. startup lobby is a clear example of this movement. Under the command of CEO Ernesto Otero and founding partner Victor Tullithe company, which was founded in 2021, is transforming the Marvelous City into a true construction site. With the forecast of delivering 4,073 units this year, sales should reach R$1.9 billion, covering the regions of Zona Sul, Centro and Niterói. “Rio has a huge demand for quality real estate, which for many years, especially after the 2016 Olympics, disappeared”said Otero.

This pent-up demand is evident in the sales pace of Lobie’s developments. With capital from the fund Real Estate Opportunityone of the recently launched projects, the Maua House — old San Francisco Hotel and the company’s first “ready-to-move-in” launch — 95% of its units were sold in just six hours. Located at the former Hotel São Francisco, near Avenida Rio Branco and a few blocks from Boulevard Olímpico, the signed contracts generated R$55 million, with apartments sold at around R$11,500 per square meter.

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Another source of good business for the company is condo-hotel managementwhich attract investors looking for the security and profitability of renting apartments. As Rio has an excess of hotels (going from 10,000 rooms in 2010 to 60,000 rooms in 2020) and an insufficient number of residential properties, the plan is to rebalance this balance..

The current Botafogo Privilege Lobbyfor example, after five years of losses like Hotel Mercurewas transformed into a residential building with services by Lobie. Today, it has an 80% occupancy rate with daily rates starting at R$280 and monthly payments of R$5,800. For investors, the yield is 13.56% per year.

The company has already transformed eight hotels into serviced residences in Riothe majority in the South Zone, in addition to Barra, totaling more than 770 units in operation per season. “We are helping to create new housing and investment concepts in the city, both for those seeking the flexibility of an all-inclusive apartment and for those who see Rio de Janeiro’s growing real estate market as an alternative for profitability”Tulli said.

Due to the group’s experience in real estate management, Lobie has attracted developers and construction companies interested in projects with this profile. Among them is Sidewalkwhich launched ON Life Flamengo, a residential complex from scratch that will have Lobie’s consultancy and management throughout the project. In addition to Casa Mauá and Lobie Botafogo, the company has several other projects in the pipeline. In the city center, there is Sal Rio Residencial, which sold more than 90% of its 186 units in five hours in July of this year. Bueno, from Calçada Construction Companyhad 100% of the 112 units sold in four hours at the launch. Dias, a project by the construction company Safira with 92 units, will be launched in the coming weeks already completed.

In the South Zone, there is the Be.in.Rio Leopoldo (Opportunity Real Estate and Brix Real Estate Investment Fund), which had 100% of the 25 units sold in six hours. In Barra da Tijuca, one of the most iconic buildings in the capital of Rio de Janeiro, designed by Oscar Niemeyer, stands out Niemeyer 360º Residenceswith 448 units.

In neighboring Niterói, Lobie has in its portfolio the Live Camboinhas (126 apartments), Meet Neo Icaraí (129) and the Saint Dominic (Valente development, with 284 units). “The recovery of the Rio real estate market depends on these new formats”said Otero. “It is in this new niche that we will grow and consolidate ourselves.”