It has been less than a year since the Radisson Hotel in Aurora, Colorado, sold for nearly $28 million, but already its new owners are envisioning a complete overhaul with plans to spend an additional $25 million converting the hospitality property into permanent apartments.
Arbor Lodging Partners, a Chicago hotel investment and management company, is embarking on a strategy to convert hotel properties across the country into housing, starting with the 440-key Radisson Hotel in the Denver suburb. The firm purchased the property at 3155 S. Vaughn Way in May with joint venture partner Bridge Investment Group, according to Arapahoe County property records and CoStar data.
The conversion will be directed by Arlo Residential, a new Arbor subsidiary overseeing similar hotel-to-multifamily and office-to-multifamily conversion projects the firm has planned across the United States.
Located near a Denver light rail station, plenty of retail and other redevelopment projects, the Radisson property is better suited for workforce housing rather than as a full-service hotel, Arbor Lodging Partners CEO Vamsi Bonthala said. The firm plans to charge below market rents at the future apartment property in an effort to appeal to renters that have been priced out of other markets.
Demolition on the Aurora site has already begun, and once complete, the property will be renamed Arlo at Nine Mile Station and will total 331 units ranging from studio to two-bedroom floor plans. Work will include a significant amount of wall demolition to create the various unit sizes and add space for kitchens and appliances. Some of the hotel’s gathering spaces such as banquet room and dining areas will be overhauled into space for a leasing office and residential amenities, which will include a coworking space, pool, fitness center and parking garage.
Construction is expected to wrap up sometime toward the end of 2023.
Renters have flocked to Aurora — Colorado’s third-largest city — for the past decade, fueling record rent growth as high as 14% this year, according to CoStar data.
As a result, developers have been quick to break ground on new projects in the area to capitalize on accelerating demand. More than 3,100 units have been added to the region’s inventory over the past five years, dwarfing the 1,200 units that were completed between 2010 and 2017. What’s more, another 1,500-plus units are moving through the construction pipeline, set to expand Aurora’s inventory by roughly 4%, according to CoStar data.