After purchasing the Quality Suites on Turkey Lake Road in April for $12.75 million, the new buyer is planning to convert the 214-room Orlando hotel into apartment units.
Infiniti Investments Solutions, Inc has filed paperwork to Orange County requesting a preliminary review meeting to discuss the proposed redevelopment effort for the 7-acre piece of property.
The hotel, built in 1990, was rebranded into a MiCasa Hotel following the acquisition. It’s located on the west side of I-4 across the street from the Orlando Health Dr. Phillips Hospital, directly next to vacant land where nearby Sand Lake Surgery Center is looking to build a new 30,000-square-foot medical complex.
Details such as how many hotel rooms will be converted into apartment units and how much the renovation effort will cost were not included in materials submitted to Orange County.
Ryan Abrams, a Fort Lauderdale-based land-use attorney who filed the application on behalf of the owners, declined to comment at this stage in the process.
The owner could not be reached for comment Friday.
This is one of many hotel-to-apartment conversion projects in the works in Central Florida. It’s becoming more and more of a national trend at a time when there’s heightened demand for more affordable rental housing on the heels of a pandemic that financially burdened hotels, according to 2021 report by BBG Real Estate Services, one of the largest commercial real estate valuation firms in the nation.
“The market is taking a different approach since COVID,” said Ahmed Kabani, who specializes in hotel transactions as the senior vice president for investments in Marcus & Millichap’s Miami office. “They are finding different uses for hotel rooms.”
Not only was Kabani Hotel Group involved in the sale of the Quality Suites on Turkey Lake Road property, but it also helped broker the deal for the Toscana Suites just south of Disney at 2950 Reedy Creek Blvd. That was purchased in April 2021 as part of a joint venture by SAR Apartment Capital, Infinity Investments Solutions, and Aramar Investments LLC for $4.5 million.
The buyers announced at the time of the purchase that they would be converting the 295-room hotel into a 140-unit, class A apartment complex. The group has filed a Site Development Plan with Osceola County for the conversion to create 151 units.
The renovation work for this project is expected to cost $10.5 million, according to a news release by SAR Apartment Capital.
Kabani said he’s impressed with the development team.
“That group, they are really into conversion and are really experienced people,” he told GrowthSpotter. “They are very bullish.”
Following the closing of the long-abandoned Toscana Suites asset, Abiel Ballesteros, the founder and CEO of SAR Apartment Capital, called the 45-year-old hotel “distressed” and said the final product will “uplift” the area.
“It is our expectation that we will add significant value to the property...by putting a dilapidated old building back into service as a beautiful residence that will stand as a shining example of what’s possible in the neighborhood, providing great quality housing at affordable rates for great tenants,” he said in a news release.
In April of 2021, South Florida developer Carlos Balzola bought the 435-room Champions World Resort in Kissimmee and is currently converting it into apartment homes. The same developer completed the conversion of the former Red Lion Hotel into The Maingate apartments.
In May, One Stop Housing, a Sarasota company that specializes in converting distressed motels into workforce housing, acquired the 154-room Ambassador Hotel just west of downtown Orlando.
The company’s CEO told GrowthSpotter he plans to invest up to $7 million on renovations for the conversion.
This would be One Stop’s ninth motel conversion in Florida. The company entered the Central Florida market with its Backlot Apartments on U.S. 192 in Kissimmee, followed by Colonial Gardens near the Orlando Fairgrounds property in Pine Hill. That property is still technically operating as a hotel, but, as of early May, Vengraff was seeking annexation into the City of Orlando with rezoning from commercial to residential to allow for long-term rentals.
Mary Ann Barnett, the affordable housing practice leader and senior managing director at BBG, said in an April 2021 report that developers are snapping up financially distressed hotels and motels across the country as a cheaper alternative to building multifamily units from the ground up.
Building a new multifamily development in a metropolitan area could cost between $150,000 and $200,000 per unit, compared with between $60,000 and $70,000 per unit for a conversion. The lower conversion price results in the ability to offer more affordable rents to the households living in the units, once completed, according to the report.
These hotels also already come with amenities that can be found in apartment communities: adequate parking, pool, fitness center and more.
“An alternate use for hotels that were negatively impacted by the COVID-19 pandemic is transformation into multifamily rental properties, a growing trend that could also significantly help ease the nation’s escalating affordable housing crunch,” Barnett wrote in the report.
Specializing in multifamily and medical real estate, Infiniti Investment Solutions, Inc. is a private investment club with $300 million in assets under management. The company’s goal is to create a $1 billion portfolio within the next ten years, according to its website.
SAR Apartment Capital is a Miami based real estate investment and asset management firm specializing in multifamily apartment syndication, with $60 million in assets under management, according to its website.