2022 Summer Issue - 48

Charleston, South Carolina-based Blaze Partners,
an attainable housing developer, has made hotel-tohousing
conversions a long-term business strategy.
Eddy O'Brien, cofounder and managing partner of
Blaze Partners, notes that conversions allow rents to
be priced $200 to $300 below market rates.
His company is focused on providing attainable
urban housing for young professionals. The company,
for example, partnered with Argosy Real Estate Partners
to acquire and convert an extended-stay hotel
in Charlotte to 124 studio and one- and two-bedroom
floor plans. Built in the 1990s, the hotel was converted
into a transit-oriented project and renamed
The Spoke at McCullough Station, since it is adjacent
to the Lynx Blue Line station that provides direct service
to the central business district and the University
of North Carolina campus in Charlotte.
O'Brien says that a conversion-to-attainableJamboree,
in partnership
with the city of Santa
Ana, California, converted
a Budget Inn motel into
North Harbor Village,
an 89-unit supportive
housing project for
residents experiencing
homelessness.
housing strategy also is attractive because cities are
supportive of attainable housing projects because
they attract a young, vibrant, and professional demographic.
While local governments may be reluctant to
give up hotel tax revenue, he notes that city leaders
take notice when a hotel loses its flag, since that
starts its death spiral toward " hotel of last resort, "
which attracts an undesirable element and becomes
a blight on the landscape.
Blaze started out in 2020 converting extendedstay
hotels to apartments as " an easy way to stick
our toe in the water, " O'Brien says, noting that meaningful
discounts on hotel acquisitions were available
at that time, but that window has closed with the
improving hotel market. With extended-stay assets
now harder to find, his company is looking at converting
traditional hotels.
" While a lot of groups are relying on distressed
hotel markets, we find creative ways to keep it
going-this is our sweet spot, " O'Brien says, though
he notes that traditional hotels are a heavier lift than
an extended-stay asset, because they are a redevelopment
play.
To be economically feasible, O'Brien says that traditional
hotels must have a minimum of 200 keys-
250 or more is preferable-because rooms are small
and must be combined to provide units measuring
400 to 600 square feet (37 to 56 sq m). The cost to
upgrade amenities and services to meet the expectations
of today's renters also is key to a project's feasibility,
he says.
Beyond that, O'Brien looks for assets located in
urban neighborhoods with access to public transit
and nearby employment centers. He says that other
considerations include the size of the community and
city support for attainable housing projects.
Guichardo suggests that struggling big-box hotels
that had depended on conventions for occupancy are
among good candidates for market-rate conversions
because they are still struggling and can be acquired
below replacement cost. She notes that these hotel
assets have large open spaces that can easily be converted
to gathering places for socializing or adapted
for apartment living, as well as amenities that apartment
and condominium dwellers desire.
Many in the industry view hotel-to-housing conversions
as a sustainable, ongoing trend due to the
need for quick solutions to the housing shortage and
the high cost of new construction.
Garchik, however, notes that with travel returning
and the hotel industry improving, there are fewer
opportunities to acquire adaptable hotel assets. " If
hotels need a substantial amount of reconfiguration,
then the deal is more difficult to close, especially
if going the affordable route. So, unless we see the
micro-unit concept make a comeback and prove out, I
see these deals working more on a one-off basis than
as a trend, " she says. UL
PATRICIA KIRK is a freelance writer based in Southern
California.
48
URBAN LAND
SUMMER 2022
JAMBOREE BY ARCHITECTURE DESIGN COLLABORATIVE
2022 Summer Issue

Table of Contents for the Digital Edition of 2022 Summer Issue
