If you have a lot of lemons, it is advisable to make lemonade.
What if you have hotel properties in a rundown hospitality market? Fortunately, you have a few options.
The Californian company Vivo Living, which transforms hotels into apartment buildings, announced the opening of its tenth “Boutique Efficiency Apartment” complex at the beginning of September. They come both furnished and unfurnished. Hotel standards such as free WiFi, lounge areas, pools and gyms are becoming amenities. The company claims more than 1 million square meters of land with more than 10,000 residential units.
“Vivo aims to reduce traffic, waste and sprawl by carefully selecting each location so that it is in close proximity to shopping, markets, entertainment and other necessities,” a company press release quoted CEO Dan Norville as saying. “We use buildings again and do not build from scratch.”
Vivo is hardly the only company that turns unused hotels into other profit opportunities. Private equity investment firm Pebb Capital recently partnered with Maxwelle Real Estate Group to announce the acquisition of the historic Bancroft Hotel and adjacent Ocean Steps commercial building in Miami Beach. Around half of the 100,000 square meters of indoor and outdoor space will be turned into a “Super Class A” office with fitness / wellness and food and beverages for a commercial high-end concept property.
“In the current marketplace, many property owners are finding that getting to market quickly is essential,” John Cerra, founding director of CetraRuddy Architecture, which has remodeled more than 40 offices, hotels, industrial lofts and more, told GlobeSt .com. “Turnaround time is now a key factor, and many developers are looking for strategies to achieve successful conversions with minimal intervention.”
“The most important evaluation criteria for these projects are the floor plan and exit, existing pipelines, the number and locations of elevators and the availability of vertical risers, pipes or lines,” says Cetra.
“Companies occupy multiple floors in hotels in real time as work / residence arrangements,” says Michael Silver, Chairman of Vestian. “Citadel recently took over a Florida hotel that they converted into a trading floor. The trend towards converted use of hotels will continue to allow employees to work remotely. No longer as a hotel arrangement, but as an apartment arrangement or work-use arrangement. “
But it takes work. Cetra advises that zoning and building codes can be hurdles and that ensuring potential gains is critical. “The project has to stand out,” he says.