With hotel prices being driven down by the COVID-19 pandemic, real estate investment firms like Lucern Capital Partners are converting the properties into multifamily assets.
The hotel conversion trend is growing among real estate investors due to the severe drop in the hotel purchase prices when the travel and leisure industry began to struggle during the pandemic. Lucern Capital Partners has a history of targeting hotels, typically equipped for extended-stay use, and converting them into multifamily real estate properties. This creative approach is well-suited for a value-add investment strategy with many rental units producing higher ROIs than what was achieved through hotel pricing. But, as more real estate investment firms are attracted to the space, competition increases, and it becomes more difficult to spot the perfect deal.
In this The Business Journals article, Lucern Capital Partners Managing Partner, Frank Forte discusses the firm’s experience in converting hotels into multifamily real estate investment assets and offers his thoughts on which properties are ideal for success.