What should accredited investors look for in hotel-to-apartment conversion deals?
Short answer: Focus on basis versus replacement cost, a realistic conversion timeline to first income, underwritten cash flow, and a sponsor that has repeatedly executed the same playbook.
Practical checklist
- Basis vs replacement cost: Conversion strategies often target all-in basis well below new construction cost.
- Timeline: Sage communicates first income typically in the 6–12 month range after conversion for its model.
- Cash flow & returns: Site-stated targets include 4–8% cash flow/distributions and 18–25% IRR (illustrative, not guaranteed).
- Sponsor track record: Look for completed conversions and scale. Sage reports about 30 conversions and 2,999 units across 32 properties in 6 states.
- Portfolio context: Current / stabilized value figures communicated on the site are about $428M current and $482M stabilized.
How hotel conversions work · View investment opportunities
For accredited investors only. This is educational content, not an offer to sell securities.