Over the past three years, we have changed our Multifamily Assets focus to Hotel conversion from Hospitality to Multifamily.
We call this relatively new asset class HTA — Hotel to Apartment — and our own brand representing it is Pace Living.
Finding the “Right” hotel that can be converted to multifamily is no easy task. In fact, for every 10- 12 properties we underwrite, only one may fit the program. There are many factors to consider when working within the HTA space.
We typically look for hotels that are already ‘as of right’ multifamily zoned, and thus will not require a full zoning change but rather a change-of-use:
Each county and city across the US has its own unique zoning and building codes. Although many are similar, it’s always necessary to check with the city/county officials for their change-of-use requirements.
When looking to invest in existing hotels or motels, it is important to consider a few elements:
1. Locations — We typically stay within city limits in central locations. In the US, we have many “business” motels that are too far from the city and don’t have business facilities near the property.
2. Demographics — Is the area growing? What is the population surrounding the asset? You don’t want to buy a hospitality product in an area where people are leaving, and the net immigration is negative.
3. Focus — It’s easier to manage several assets within the same region. The HTA operation is no easy task, and if you are just starting, you may want to focus on a familiar area or one where you have “boots on the ground”.
We are currently working throughout the Southeast, but after being involved in more than 10 projects, we feel confident in expanding to other areas.
We see a great need for Workforce housing that is both affordable and desirable. We strongly believe our Pace Living brand can fill the gap for those who need a Place to Call Home.