Los Angeles Startup Takes Advantage of Unused Commercial Space, Creates Pod Hotels

Stay Open, Los Angeles, San Diego, Venice Lab, Budget Rent a Car
Courtesy of Carrier Johnson and Culture

By Catherine Sweeney

A Los Angeles-based startup has been taking advantage of the growing amount of available commercial space caused by the COVID-19 pandemic. By converting these spaces into pod hotels and co-living communities, the company, Stay Open, aims to offer travelers a unique experience without breaking the bank.

“We take commercial real estate that typically wouldn’t be modeled for a hotel or residential property, so mostly offices and retail locations, and find ways to turn them into residential properties,” Co-Founder and CEO Steve Shpilsky said. 

Shpilsky explained that the organization provides travelers with a place to stay while offering a sustainable and affordable option. So far, Stay Open is in the process of opening its first pod hotel, a former Budget Rent a Car facility in San Diego. The pod hotel likely will be completed in the next two years, and will house approximately 240 beds.

According to Shpilsky, Stay Open facilities will range in design, depending on the size of the acquired commercial space. However, all Stay Open hotels and residences will consist of private rooms, each with four to eight private sleeping pods, shared bathrooms, common rooms and eating areas. Common areas also will be maximized by serving as a space for guests to take classes from various fitness instructors and lifestyle coaches. 

“Let’s use all those times in the day, and the lobbies and common areas and let’s activate them because there’s so many great people out there that you see on Instagram and TikTok that can offer those experiences if they had a space to do it and a distribution to people that would be interested in those experiences,” Shpilsky said. “They don’t need to rent a yoga studio or a huge floor space…so it’s like making the real estate as flexible as possible while providing a better user experience for the guest.”

According to Shpilsky, guests at Stay Open properties will be able to choose which pod they stay in by connecting with other travelers via Stay Open’s social networking platform. This will allow guests to connect with other individuals while also allowing them to find other guests with similar itineraries and sleep schedules.  

“What Stay Open is, is we’re providing an affordable place for people to travel to…we provide the social platform that connects people to each other where they get to meet in real life and go on experiences together in real life. It’s one of the more memorable things about travel, it’s who you meet and the adventures you go on,” Shpilsky said. 

Founded in 2018, Stay Open recently launched its co-living beta site in Venice. Referred to as the Venice Lab, the site serves as company headquarters while also offering several sleeping pods on site.  

“We wanted a way to open very quick, but also a place to curate ideas,” Shpilsky said. “It’s kind of an exciting time to be part of this renaissance of people coming together.”

Following its upcoming San Diego site, the company plans to expand in the coming years throughout the U.S. after recently closing on a $2 million seed funding round. According to Shpilsky, the company plans to grow at an accelerated pace through repurposing unused office space and avoiding building from the ground up. 

“We thought, what is the most affordable way to provide a bed that doesn’t compromise safety, security and privacy?…Let’s embellish on the positive attributes of why people love traveling and make it cheaper. The beautiful thing about all this space is we’re a startup and building from the ground up is going to take years.”

According to a recent report from Newmark, the Los Angeles office market has plenty of available commercial space to choose from after suffering major losses during the COVID-19 pandemic in 2020. Newmark reported 4.1 million square feet of losses in Los Angeles’ office market in 2020. Additionally, the brokerage firm reported a record high vacancy rate of 16.5 percent. At the same time in 2019, the vacancy rate in Los Angeles’ office market was at 14.2 percent. 

“It takes forever to build a hotel and it’s very expensive…the other thing is that there’s so much available space right now, even pre-COVID, but COVID has accelerated the phenomena of available space,” Shpilsky said. “The dynamic has probably changed forever and then the question is, ‘what are we going to do with all this space?’”