The hospitality industry has taken a beating the past couple of years. This has led to some investors converting hotels into multifamily units. The idea seems logical considering multifamily housing has still been in demand during the pandemic but here are some things to consider before you jump in. 

Location

Most hotels are located near office buildings, industrial parks, etc. A multifamily community might seem out of place in these locations. You’ll want to check the zoning ordinances to see if it will allow multifamily properties. Also check the parking ratio and floor area ratio that is required. If changes to the zoning are required, that will be extra time added to the project and there is no guarantee that they will be approved.

Square Footage

How big are the hotel rooms compared to the square footage of an apartment? Will you need to knock down walls to increase the square footage per unit? Most hotel rooms are more than half the size of an apartment. Some hotel rooms could be easily converted into studio apartments but make sure you evaluate and plan accordingly - workforce and affordable housing is often a viable option.

Exit Plan

Previously we posted an article titled “Do You Have An Exit Strategy?”. This is an important step to figure out before you even start on the project. If your plan is to sell after construction, then potential investors will size up the project based on the items mentioned above. 

How To Get Started?

Simple Commercial Capital is here to help you navigate all of the requirements for the type of commercial real estate mortgage that works for you. Look through the loan programs found at the top of our page. Each program has a brief description and loan parameters. If one of the loan programs fits your needs click the Apply Now button to start the application process or call us at 1-866-554-1120 to discuss your options in more detail. Our goal is to make this process as simple as possible for you.