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Hotels & Hospitality Development News in Central Florida

Another Orlando motel could be repurposed for workforce housing

The 2-story exterior-corridor hotel at 5858 International Dr. sold in April for $16 million.

While Osceola County commissioners changed their land development code to tighten regulations on hotel-to-housing conversions, developers are finding the City of Orlando more receptive to the process.

On Tuesday, the city’s Municipal Planning Board approved One Stop Housing’s rezoning application for the Ambassador Hotel at 929 W. Colonial Dr. to convert the property into 150 units of affordable housing. The city is also in the process of annexing the former Colonial Gardens in Pine Hill, facilitating the property’s transition from an extended stay motel to long-term rental housing.

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“In Osceola, they want everyone to do workforce housing all in a certain section of town. They want to kind of keep (W192) more of a commercial corridor,” CEO Mark Vengroff said. “So where we specialize in taking distressed assets and then renovating them into multifamily apartments, so you need an existing asset for the most part. The city of Orlando, Buddy Dyer’s office, and the affordable housing staff, Lisa Portelli, have been phenomenal to work with.”

The Ambassador Hotel, at 929 W. Colonial Drive in Orlando, is pictured on Tuesday, May 3, 2022. The hotel will possibly undergo a residential conversion.

Vengroff told GrowthSpotter he plans to invest up to $7 million on renovations to convert the motel’s 154 rooms into affordable multifamily housing. He applied for rezoning and filed a Master Plan with the city outlining the scope of work, which includes repairing the roof and sprinkler system, upgrading the electrical and plumbing, and renovating the two-story motel into a community consisting largely of studio apartments.

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City Planner Jim Burnett told the MPB the staff holds pre-application meetings weekly with developers looking to convert budget hotel properties into affordable housing, both on Colonial Drive and around International Drive. He said conversions — when done correctly — improve the value of the property and reduce crime and transiency in the surrounding neighborhood.

“We see it as a win-win,” he said.

K2 Developers is the latest firm looking to enter the Orlando market. The company, which has offices in Miami and Boulder, Colorado, specializes in providing “dignified, economically priced housing” to essential workers in resort destinations.

Managing Partners Andrew Korge and Dan Kessler told GrowthSpotter they have a purchase contract for the Quality Inn at 5858 International Dr. Their company mission statement is to provide transit-oriented attainable housing solutions in resort markets by repurposing existing properties and through ground-up construction.

The developers had a pre-application meeting with Orlando planners in May to discuss the proposed master plan and the potential need for a parking reduction. Kessler said the asset would be “transient in nature,” meaning it wouldn’t be fully converted to residential use.

The 2-story motel was built in 1973 and sold just two months ago for $16 million to Jacksonville-based Rore Investment Group. It has 251 rooms and sits in a prime location, next to Universal Studios Endless Summer Resort.

“The property is in major need of rehabilitation,” Kessler said. “The asset is transit-oriented with a bus stop out front and highway access and near a large concentration of employers and essential workers we look to serve. Our residents will be able to walk to work and easily get to the grocery store. The asset also has some existing amenities, and we will be adding many more amenities on top of that so the residents feel like they belong to a peaceful, fun community.”

Korge said the company would invest millions of dollars to renovate the existing rooms into efficiencies typically found in extended stay hotels. The rental rates would be priced somewhere between luxury market-rate housing and income-restricted affordable housing.

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“For the level of finish and level of amenity, this will be the best deal you can find in this part of Orlando,” Korge said.

It’s the second Quality Inn that sold in the last few months now being targeted for residential conversion. Infiniti Investment Solutions has filed paperwork with Orange County to convert the Quality Suites on Turkey Lake Road, which it purchased for $12.75 million.

K2 Developers have a 101-key conversion project underway in Steamboat Springs, Colorado. That project is described as dormitory-style housing for seasonal workers. Other projects in their development pipeline stretch from Orlando to Maui, HI. “Our target markets are ski, sand and entertainment destinations that have been disproportionately impacted by the high cost of housing and high wage disparity,” Korge said.

Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @byLauraKinsler. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.


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