KISSIMMEE, Florida – A previously aging extended-stay hotel has new life and new purpose, thanks to commercial real estate investment leader PEG Companies [PEG]. The Provo-based investment firm acquired the property – located at 3020 Reedy Creek Blvd – and strategically converted it from Hawthorne Suites Kissimmee Gateway into a much-needed Class-B workforce housing community, now called Avia Apartments at Reedy Creek.
Having undergone a renovation two years ago, the property came fully equipped with amenities ideal for apartment living including quartz countertops, stainless steel appliances, open-concept floor plans, a resort-style pool, and more, making for a rapid and seamless conversion process for PEG.
“The previous Hawthorne Suites was in, overall, good shape,” said Soren Halladay, Chief Investment Officer at PEG. “We spent the last several months re-entitling the property and then closing on the acquisition. Now, all we really need to do is update some of the amenities,” he explained.
Now under the operation of PEG Property Group [PPG], the property management team that operates all newly converted Avia properties for PEG, the Reedy Creek location began leasing units in early 2021 with renovations to the fitness center, outdoor courtyards, and additional spaces under way.
The Avia Apartments brand plays to all of PEG’s strengths while filling a growing need. Currently, metro areas across the United States are facing major affordable housing shortages.
“The dearth of affordable housing poses a significant threat to housing stability for so many residents in our hospitality corridor. Addressing the critical need for housing in Osceola County, and elsewhere, will rely on creative and innovative projects like Avia at Reedy Creek!” said Chip Tatum, Chief Executive Officer at the Apartment Association of Greater Orlando. “Congratulations to PEG on the successful conversion of this underutilized hotel into high quality, attainable, rental housing. Hotel conversions and other adaptive reuse projects are an effective solution to increasing the supply of attainable housing. We commend PEG for their leadership, innovation, and commitment to providing rental housing that is so critically needed in our market.”
PEG’s investment strategy to convert discounted extended-stay hotels into Class-B multifamily housing is structured as a value-add fund that focuses on urban/suburban-urban core markets. The firm is currently executing on similar deals in Overland Park, Kansas; Austin, Texas; Buffalo, New York; and more.
“The conversion in Kissimmee is a strong example of PEG’s strategy in action. Situated near the east entrance of Walt Disney World in Orlando, Florida, our new Avia Apartments will help fill a significant need for attainable housing for the working class. With experienced teams able to operate the property at the highest of levels, we are well positioned here and excited to have broken into the Greater Orlando market,” Halladay said.
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