Black Swan Buys and Revives Short-Term Rental Brand Lyric

25.08.2023 - 13:26 / skift.com / Srividya Kalyanaraman

There are stories of “software eating the world” and leaving a dust trail of fallen companies behind. This is not that story.

This is about a tech company and property manager that failed, and a leader who learned a hard lesson about skills and market demands. 

Florida-based Black Swan, a real estate investment firm, has acquired former short-term rental operator Lyric, which specialized in multifamily buildings until its demise during the pandemic. The acquisition has bought Black Swan Lyric’s domestic and international trademark rights, operational and performance data, and the lyric.com domain. 

Andrew Kitchell and Joe Fraiman founded Lyric in 2014 to demonstrate a use case for revenue management software company Wheelhouse, which they also co-founded. In 2019, Airbnb led a $160 million funding round in Lyric, which wound down operations during the pandemic when such companies as Lyric, Domio and Stay Alfred with master leases for multifamily buildings burnt too much cash and couldn’t scale operations. Sonder, which had raised $839 million before it went public, was one of the few of this ilk that survived.

“Hospitality is incredibly hard. You have to scale it patiently, and there was so much capital available,” said Andrew Kitchell, co-founder and CEO of Lyric and Wheelhouse. “I was a CEO of a brand given $160 million to scale. And I had never run an operations company or a hospitality company before.”

Kitchell explained he co-founded Lyric based on three core beliefs: One was that the short-term rental space was massive and misunderstood. Two was that professionalization was inevitable, and the third was that pricing and financial intelligence was incredibly important. If you wanted to actually build and scale a brand. 

And at the time, Kitchell said, that the short-term rental short-term mentality grew out of investor excitement around WeWork — where commercial real estate could become a consumer-facing brand, including an upscale consumer brand revolving around underutilized apartment inventory.

By the first quarter of 2020, Lyric was operating nearly 600 units, mostly in multifamily buildings, across 17 markets. Notable Lyrics included 70 Pine in New York City, Park 12 in San Diego, Muze at Met in Miami, and Catalyst in Houston.

“When we went out to raise our Series B, we set out to raise $30 million and we ended up raising between equity and debt, $160 million,” Kitchell said. “And we were offered far more by investors, but we wanted to work with Airbnb and other folks. It was an insane capital environment. The notion then at the time was, ‘how quickly can you grow?’”

Kitchell noted that the cracks in a rapidly scaling operational business weren’t starting to show yet. “So we routinely asked,