Company pays $11 million for motels to become apartments

A California-based company paid $11 million this week for 4903 Market St. in Wilmington, a property that includes nearly 8 acres and two motels.

The buyer, Vivo Investment Group, plans to transform all rooms in the motel into more than 230 efficient apartments. Currently, the Budgetel Inn and Motel 6 at 4903 Market St. are used as motels and share a lobby.

“We will keep the hotels in operation until we receive building permits from the city,” Vivo chief investment officer and company partner Brett Tanimoto wrote in an email Friday. “We expect to start construction in Q2 2022.”

Tanimoto previously said that Vivo will upgrade the property with amenities seen in Class A apartments, including completely renovated interiors, new kitchen appliances, a gym, a tenant amenity lounge, a coworking, high-speed Internet connection, laundry facilities, swimming pool, barbecue and green space.

The property was rezoned to a multi-family designation in October, and Vivo agreed to designate 10% of the units as affordable housing.

Vivo, headquartered in El Segundo, Calif., has developments across the United States, including another in North Carolina, in Winston-Salem.

Eastern Carolina Vice President of Commercial Real Estate John Hinnant and ECCRE partner Nicholas Silivanch represented the seller, Hotels Plus LLC, in the Dec. 14 transaction.

Along with the sale of Budgetel Inn and Motel 6, Wilmington-based ECCRE has sold three hotels in the past 12 months and recently listed additional hotels in the area, according to a press release.

“The current trend of converting hotels into multi-family properties will continue as older hotels lend themselves well to efficiency or affordable studios for entry-level workers,” the ECCRE statement said.

Silivanch said Vivo’s redevelopment project will energize the area.

“Market Street has beautiful and inspiring segments, like Downtown to 23rd Street and Bayshore to Porters Neck. Other sections are known as Auto Dealer Mile or Retail Hub for Midtown,” he wrote in an email Friday. “These older hotels, which have been around for a while, are right downtown. Specifically, walking distance from the property is the Carmike Theater, Target, Food Lion, Planet Fitness, Captain Bills, all of which offer shopping, jobs, or entertainment.”

Silivanch added, “By using the existing structure, it allows for adaptive reuse of the property, which won’t add a burden to our city’s infrastructure like new development does.