An Altamonte Springs motel has been put on the market for $7 million, but it may end up finding new life through redevelopment.
The 34-year-old Days Inn & Suites off I-4 near the Altamonte Mall has seen better days, and as a result could be bought for its land value over lodging potential.
The development could be the beginning of a trend for older Orlando area motels that have outlived their cache, industry experts say.
The 38,712-square-foot Days Inn, which sits on 2.39 acres, may not go cheap. It's being offered for almost $5 million more than when it last sold in 2003.
Since then Orlando's motel landscape has changed, with other lodging chains becoming more popular and offering more to guests.
"There are statistics that show rooms coming out of the market because the motels are so old they have more value as dirt," said Paul Sexton, vice president at HREC Investment Advisors, a financial advisory firm for hotels. "In appraiser terms, they are functionally obsolescent."
The older motels don't meet the needs of today's consumer, in large part they have exterior corridors that can invite danger and don't have same amenities that new hotels have, Sexton said.
He cited Hampton Inn and Fairfield Inn as being more current and competitive hotel flags, and Days Inn as "an older brand that did not upgrade their product as others did over the years."
Marketing literature for the 120-room Altamonte hotel says the property can be operated as is, or be a "hot" option for redevelopment.
The parcel "has versatility going for it," said Ali Mushtaq, the Sperry Van Ness broker representing the site.
In terms of redevelopment, the property is located in the future land use of Altamonte Springs' regional businesses center core west. This opens the door to many types of redevelopment options, like retail, hotel, high rise and assisted living.
The property also has in its favor the location at 150 S. Westmont Dr., which is going to be widened as part of the I-4 renovation, bringing more traffic past its doors.
Mushtaq is not giving up on the motel staying as is, saying it's in very good condition, with rooms having been renovated less than two years ago, and the current owner securing the Days Inn flag.
The facility is also "a strong revenue producer," having a 7.54 percent cap rate, Mushtaq said. It could be ideal for foreign investors who have been investing in hotels to get their visas and show they operate an ongoing business, he added.
The property came on the market Thursday, and Mushtaq said he has already received over half a dozen phone calls. Interest has been split between the property remaining a motel and it being redeveloped, he said.
There is also the option of keeping the site as a motel for a time, and redeveloping in the future.
The land is owned by Dhansukhbhai "Danny" Patel, who paid $2.1 million for it in 2003, in a purchase from La Quinta Investments Trust, property records show. Patel could not be reached for comment on Friday.
The Patel family is in the hotel business, and Danny is selling because he is preparing to retire, Mushtaq said.