1Diligence12–18 monthsTeams work with municipalities to rezone and permit the conversion, all before closing.
2Development6–18 monthsHotel rooms become apartments with full kitchens, and common spaces become resident amenities.
3Lease-Up3–9 monthsProperty managers start pre-leasing before construction ends to bring the property to market.
4OperatingUnder 2 yearsAsset management works with on-site teams to run efficiently, then seeks to refinance and return capital.
5SaleYear fiveAt peak value, the property sells to a multifamily operator and proceeds roll into new acquisitions.
Why conversions create value
The same income is worth about twice as much as apartments
Valued as a hotel · ~12% cap rate$8.3Mfor $1.0M of annual income
Valued as apartments · ~6% cap rate$16.7Mfor the same $1.0M of annual income
Hotel income swings night to night and takes a lot of work to run, so buyers pay less for each dollar of it. Apartment income is steady and easy to finance, so buyers pay more. Converting a hotel takes 6 to 18 months and costs about half as much as building new.
Illustrative example, not a specific property. Cap rate = net operating income ÷ property value.
DiligenceHow we find hotels off-marketPhil Cohen · Town hall [Date]
DiligenceWhy we walk away from dealsPhil Cohen · Town hall [Date]
DevelopmentThe 50/50 rule: where renovation dollars goPhil Cohen · Town hall [Date]
DevelopmentTurning hotel rooms into homesPhil Cohen · Town hall [Date]
Lease-UpHow we lease up a converted propertyDina Treyger · Town hall [Date]
Lease-UpWho lives in a Sage communityDina Treyger · Town hall [Date]
OperatingGrowing income after stabilizationDina Treyger · Town hall [Date]
OperatingHow refinancing returns capitalDina Treyger · Town hall [Date]
SaleWhen and why we sellPhil Cohen · Town hall [Date]
SaleInside the Sahara saleDina Treyger & Phil Cohen · Town hall [Date]