The pandemic in 2020 slowed tourism throughout the nation, leaving the hospitality industry economically devastated, with hotels and lodging among the hardest hit. After a year of record-breaking occupancy for hotels, many were forced to close their doors for good and others are still trying to recover.
In stark contrast, the demand for multifamily housing is at an all-time high but move-in ready apartment availability at a decent price is hard to find. Residential developers are using this as an opportunity to look at existing buildings and inventory in a new way.
Arizona-based MEB Management Services, a property management company that provides management services to all types and qualities of multifamily assets, seized the opportunity to start an adaptive reuse project with a struggling hotel in Prescott, Arizona.
The hotel, previously known as Comfort Inn and Suites was redeveloped into The View at Prescott Valley.
The View offers exclusive short-term multifamily housing, and temporary housing arrangements on a 4-week (28-day) rolling basis to those seeking a place to live while they search for their permanent home.
Short-term housing has been evolving quickly with the increasing popularity of temporary rental opportunities with big groups like VRBO and Airbnb.
The majority of these rentals are located in multifamily housing buildings, according to the National Multifamily Housing Council. Short-term rentals are now bouncing back faster than hotels and the multifamily housing industry has the opportunity to dive into this market.
Many key components of the short-term housing model created by MEB mirror those of hotels such as comparable prices driven by the extended stay submarket in the area, floorplans and room set ups, common areas, amenities, completely furnished units with utilities. The reconstruction of adapting hotels into multifamily housing is less expensive than that of reuse of commercial buildings that have been in the news recently, as the only notable conversions that need to be made are focused on the hotel’s technology.
MEB found a way to retool the software they typically use for property management to accommodate short-term multifamily rentals. The usual multifamily housing software used by MEB was updated to adjust the taxes, billing and turnovers.
In addition, unlike operating hotels, the View does not have the overhead of a 24-hour staff. Once boots hit the ground on this reuse project, the team had to bring on team members with different skill sets such as marketing, technical, and operators who could collaborate with the MEB team and adjust the tools already being used to run a hotel-style operation.
A few other changes were made such as removing phones from the rooms and unit access was converted to a more conventional lock and key method, rather than the hotel’s previous swipe card technology.
Like many companies in the current market, MEB has had to prove their flexibility and agility by thinking out of the box. While The View at Prescott Valley is MEB’s first experimental hotel repurposing opportunity, the project has proven to be a viable option that has the potential for creating more multifamily housing opportunities without the high cost or long wait for new construction.
Author Mark Schilling, MEB Management Services.