After buying the Quality Suites on Turkey Lake Road in April for $12.75 million, the new buyer plans to convert the 214-room Orlando hotel into apartments.
Infiniti InvestmentsSolutions, Inc. filed documents with Orange County requesting a preliminary review meeting to discuss the proposed redevelopment effort for the 7-acre property.
The hotel, built in 1990, was renamed MiCasa Hotel following the acquisition. It is located on the west side of I-4 across from Orlando Health Dr. Phillips Hospital, right next to vacant land where the nearby Sand Lake Surgical Center is planning to build a new medical complex. of 30,000 square feet.
Details such as the number of hotel rooms that will be converted to apartments and the cost of the renovation effort were not included in the documents submitted to Orange County.
Fort Lauderdale-based Ryan Abrams land use attorney who filed the application on behalf of the owners, declined to comment at this stage of the process.
The owner could not be reached for comment on Friday.
This is one of many hotel-to-apartment conversion projects underway in Central Florida. According to the 2021 report of BBG Real Estate Servicesone of the nation’s largest commercial real estate appraisal companies.
“The market is taking a different approach since COVID,” said Ahmed Kabani, who specializes in hotel transactions as senior vice president for investments in the Marcus & Millichap office in Miami. “They find different uses for hotel rooms.”
Not only was Kabani Hotel Group involved in the sale of the Quality Suites property on Turkey Lake Road, but he also helped broker the deal for the Toscana Suites just south of Disney at 2950 Reedy Creek Blvd. This was purchased in April 2021 as part of a joint venture by Capital of SAR ApartmentsInfinity Investment Solutions, and Aramar Investments LLC for $4.5 million.
The buyers announced at the time of purchase that they would convert the 295-room hotel into a 140-unit Class A apartment complex. The group has filed a site development plan with Osceola County for conversion to create 151 units.
Renovation work on this project is expected to cost $10.5 million, according to a press release from SAR Apartment Capital.
Kabani said he was impressed with the development team.
“This group, they’re really in conversion and really experienced people,” he told GrowthSpotter. “They are very optimistic.”
After the long-abandoned Toscana Suites asset closed, Abiel Ballesteros, the founder and CEO of SAR Apartment Capital, called the 45-year-old hotel a “distress” and said the end product will “elevate” the area.
“We hope that we will add significant value to the property…by bringing an old, run-down building back into use as a beautiful residence which will be a shining example of what is possible in the neighborhood, providing high quality accommodation for a affordable rates for good tenants,” he said in a press release.
In April 2021, South Florida developer Carlos Balzola purchased the 435-room Champions World Resort in Kissimmee and is currently converting it into apartments. The same developer has 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 run-down motels into workforce housing, has acquired the 154-room Ambassador Hotel just west of downtown Orlando.
The CEO of the company said GrowthSpotter he plans to invest up to $7 million in 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 US 192 in Kissimmee, followed by Colonial Gardens near the Orlando Fairgrounds property in Pine Hill. This property still technically operates as a hotel, but in early May Vengraff was seeking incorporation into the city of Orlando with a rezoning from commercial to residential to allow for long-term rentals.
Mary Ann Barnett, a leader in affordable housing practices and BBG’s senior managing director, said in an April 2021 report that developers are snapping up financially-struggling hotels and motels across the country as a cheaper alternative to building multi-family units from scratch.
Building a new multi-family development in a metropolitan area could cost between $150,000 and $200,000 per unit, compared to between $60,000 and $70,000 per unit for a conversion. The lower conversion price translates into the ability to offer more affordable rents to 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, swimming pool, fitness center and more.
“Another use for hotels that have been negatively impacted by the COVID-19 pandemic is for conversion into multi-family rental properties, a growing trend that could also contribute significantly to alleviating the growing affordable housing crisis in the country,” said Barnett writes 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 the syndication of multi-family apartments, with $60 million in assets under management, according to its website.