Cribspot closing in sight
Cribspot, an Ann-Arbor based real-estate start-up that was founded by three University students, is slated to close parts of their Ann Arbor office this year, according to local landlords. As finding housing can be a difficult process for all college students — taking into account several different factors including cost, location and the conditions of the actual apartment itself — this closure has been received with mixed reactions.
Over the years, Cribspot has expanded from Ann Arbor to college towns across the country, including Lansing and Chicago.
The company has already begun the process of shifting management at their properties.
A Cribspot spokesperson was unable to comment at time of publication.
A current Cribspot tenant, LSA sophomore Sydney Bagnall, said she has yet to hear from Cribspot with regard to their closing. Bagnall explained she chose to use Cribspot because she wasn’t planning to come back in the fall and at the last minute “they were all (she) had to choose from.”
Business alum Liz Herrick described her chaotic experiences with Cribspot. She said there was a lack of communication with staff, the house was not cleaned at move-in and she had to threaten litigation multiple times.
“I’m not surprised they’re closing. They just couldn’t manage what they took on,” she said.
The timing of the closing of Cribspot came as a shock to those in the housing business. In an email interview, Jon Keller, president of J. Keller Properties, said he would have expected the company to close at a different time.
“The closing of cribspot came as a surprise to us at J Keller Properties,” he wrote. “I expected this to come during a softening of the rental market- not at its peak.”
Furthermore, he said relatively little is known about the cause of Cribspot closing.
“I don’t know if it was a calculated closure or if the ‘rent guarantee’ was a cause,” he said.
According to Cribspot's website, their “rent guaruntee” ensures landlords of their properties will recieve 100 percent of the rent they charge, regardless of whether the property has tennants.
“You'll receive the rent you want, no matter what, even if we struggle to find tennants or if our tennants stop paying,” their website states. ‘‘It's your ensurance policy against vacancies.”
While the reasons for Cribspot’s closing remain unknown, Keller speculated as to what factors may have led to the closing of the company — one such factor being its management model.
“We had a feeling the Cribspot model was not sustainable based on the guarantees they made and rates they charged,” Keller said.
An ex-employee of Cribspot, who requested to remain anonymous, explained a similar theory behind Cribspot’s closing.
“Essentially what happened — to the best of my knowledge — is that the company was kind of going in two different directions, one more tech oriented and the other more concerned with the physical business of Ann Arbor housing management,” he said. “With this in mind it was starting to look less feasible for the latter to continue functioning if the company was to follow these two separate paths.”
Keller affirmed this point, adding limited experience may also have played a role in the difficulties faced by Cribspot.
“I really liked the founders and the disruption they caused, but cribspot was a tech company first- with very limited experience in property management,” he said.
Nick Hume, a property owner, agreed with this statement, saying that a lack of property management knowledge in Cribspot contributed to the difficulties his tenants complained of.
“They needed experience,” he said.
The house-leasing market offers many hurdles for newcomers to overcome, and those who have been in the market for a long time, such as Keller, believe it is difficult to stand out in the industry of housing management.
“With that limited brokerage experience and a lack of supporting maintenance teams, it was certainly an uphill battle for them in a unusually tough college market,” Keller said.
The anonymous employee agreed.
“My opinion is that there was a lot of young energy in the office, a lot of millennials, and a lot of bright futures, although I somehow doubt that many of us will make our names in the housing management industry,” the employee said.