OVERLAND PARK, KS – PEG Companies [PEG], a leading commercial real estate investment firm known for its unique approach to creating value, closed on its 15th extended-stay hotel acquisition, a Hawthorn Suites, with the intent to immediately begin converting the property into quality Class B apartments.
Located at 11400 College Boulevard, the 108-key hotel has a unique layout that, according to PEG, lends itself to a seamless conversion into multifamily. PEG plans to spend between $4 million and $5 million to make key updates to the units including the replacement of countertops, cabinets, flooring, light fixtures, and the addition of washers and dryers. Project leaders also plan to make improvements to amenities like the pool, fitness center, and clubroom.
“The need for attainable workforce housing across the United States is growing all the time, especially since the onset of the global COVID-19 pandemic,” explained Cameron Gunter, Chief Executive Officer at PEG. “By converting an aging extended stay hotel into a multifamily product, our cost-per-unit is significantly lower than it would cost to build these apartments from the ground-up. As a result, we’re able to offer much lower lease rates to renters in Overland Park.”
According to a recent CoStar report, Johnson County has emerged as one of the most desirable areas of Kansas to reside. As a top destination for employers, the submarket has been the primary beneficiary of job movement from Missouri to Kansas in recent years and has the highest concentration of office space in the metro.
The property joins the PEG Extended-Stay Conversion Fund [PEG ESCF], an investment vehicle dedicated specifically to the firm’s hotel-to-apartment conversion strategy, which continues to generate interest among investors looking to leverage the current economic environment while providing housing solutions to markets across the U.S. The firm also created a special brand for its converted properties called AVIA Apartments. Going forward, the former Hawthorn Suites property will be known as AVIA Apartments at College Boulevard.
PEG aims to commence construction on AVIA Apartments at College Boulevard in early March while simultaneously working through the approval process with the city to re-entitle a second extended stay hotel in Overland Park, the Cloverleaf Suites located at 6300 West 110th Street. The firm’s next scheduled meeting with the city council is March 1st.