Market Street motels could get a second life as apartments
A California-based real estate investment company aims to turn two motels on Market Street in Wilmington into efficient apartments.
Vivo Investment Group, a company specializing in such conversions, is proposing to transform the Budgetel Inn and Motel 6, both located at 4903 Market Street, into a 230-unit multi-family complex.
Capitalizing on a real estate trend that is expected to grow, Vivo began its first conversion in 2019, a project to turn a historic hotel in Ogden, Utah, into apartments, said Brett Tanimoto, chief investment officer for Vivo Investment Group. , in an email.
Further explaining the motel conversion trend, Tanimoto said, “There has been a continuing crisis in the United States where house prices and rents are simply not affordable due to a rapidly growing population and d ‘a limited offer. This impacts most Americans, as millions of people struggle to afford to live on their own, and millions more spend 50% of their income on housing, which often pushes them into debt.
At the same time, Tanimoto said, new hotel developments have left older, mostly vacant hotels and motels “functionally obsolete.”
He added: “Although both conditions existed before the COVID-19 pandemic, it has exacerbated the situation. By converting these distressed hotels into residential apartments, Vivo can cost-effectively and sustainably deliver a new supply of higher-demand apartments to those who need them most.
This need is evident in the port city, he said.
“Over the past 10 years, Wilmington has experienced strong population growth and increased demand for housing, but due to the lack of available land and high construction costs, housing costs are out of control,” Tanimoto said. “Our mission is to solve the housing crisis in the United States, and converting low-demand hotels and motels into workforce housing is one way to achieve our goal. ”
The 7.7-acre Budgetel Inn and Motel 6 property is currently under contract with Vivo, Nicholas Silivanch of Eastern Carolinas Commercial Real Estate said Thursday.
“As part of the sale, the property will require a rezoning [from the city of Wilmington] to enable multi-family use, changing the current zoning from regional business ownership to multi-family, ”Silivanch said in an email. “This rezoning will create efficient apartments for the Wilmington workforce and located in a part of Wilmington in the center of downtown, area beaches and employment hubs.”
Silivanch and his fellow commercial real estate broker John Hinnant of ECCRE marketed the property for the current owner, Hotel Plus LLC. Silivanch said Vivo’s proposal differs from some of the area’s recent apartment building trends.
“Most of the new complexes developed or underway are luxury apartment communities, which are built on vacant land,” Silivanch said. “This refurbishment of an existing facility, through adaptive change in use, will have all of the modern apartment community amenities desired, but at affordable labor / rental rates.
“This redevelopment does not add new impermeable areas or remove trees. Instead, by taking what’s already there and reusing it, it provides much-needed housing, with minimal new environmental impacts, ”he added.
Explaining the rental rates Vivo Wilmington apartments would have, Tanimoto said, “We create apartments at market price and are not dependent on any government subsidy. Vivo apartments are priced 10-20% less than the average apartment in a given market. We offer fully renovated units with new flooring, kitchens and bathrooms and amenities found in Class A apartments such as a swimming pool, guest lounges, gymnasiums, dog parks and outdoor barbecue areas.
Vivo has developments across the United States, including one in North Carolina at Winston-Salem, which Tanimoto described as “a huge success.”
He said: “We bought the property in September 2020 and we are about 90% leased in less than 12 months.”