INDIANAPOLIS, IN – An aging extended stay hotel has new life as an apartment community, thanks to an innovative investment strategy the property’s new owners have in store. After acquiring the Gen. 1 Residence Inn at 3353 Founders Road last month, Provo-based PEG Companies [PEG] has reopened the property as a Class-B workforce housing community called the AVIA Lofts at Founders Road.
“We are excited to bring this much-needed workforce housing community to Indianapolis,” said Soren Halladay, Chief Investment Officer at PEG Companies. “We review a multitude of potential extended stay hotel acquisitions each week and are very selective about which properties we choose to convert. This one checked all of the boxes for us,” he explained.
To date, PEG has acquired 17 extended stay hotels like this one and is currently raising $150 million for the PEG Extended Stay Conversion Fund, LP. Typically, when PEG converts a hotel property, the interiors of the units become one of the first things they update. Because with this project, the interiors have already recently undergone renovations under previous ownership, PEG can now invest more time and capital into the exterior of the property and its amenities.
“We plan to spend about $25K per unit in hard and soft costs,” Halladay said. “Some of our plans include expanding and improving the fitness center, updating the pool and lounge areas, adding outdoor grilling stations and fire pits, improving the laundry facility, redoing the exterior of the buildings, beautifying the landscape, and beyond.”
When the conversion is complete, the 88-unit property will have 22 two-bedroom units, 26 one-bedroom units, and 40 studios, costing between $700 and $1,125 per month to lease. Currently, PEG is leasing the units as they through the firm’s property management arm, PEG Property Group.
“One of the things that makes PEG so unique is our ability to handle the entire life-cycle of these properties ourselves. From re-entitling the properties with our acquisitions team to converting the assets through our development division, and all the way through to property management and the eventual disposal of the assets, our vertically aligned company can do all of it in-house,” Halladay explained.
PEG cites the location of AVIA Lofts at Founders Road as another great strength. A recent market analysis they conducted found that occupancy levels in the area tend to stay at about 94% or above. With close proximity to College Park businesses and Ascension St. Vincent Hospital, PEG looks forward to offering viable housing solutions to the growing workforce in Indianapolis.