A long-standing hotel in the middle of Orlando is being converted into affordable housing by One Stop Housing through a public-private collaboration that Orlando Mayor Buddy Dyer said was a first-of-its-kind approach for the city and one that should be replicated in other areas, earning the property sale a 2023 CoStar Impact Award, selected by a panel of local industry professionals.
While many in the community viewed the aging Ambassador hotel at 929 W. Colonial Drive as a low-quality hospitality site, Cushman & Wakefield Senior Director Glen Jaffee saw an opportunity to add some much-needed affordable workforce housing and help alleviate the city's housing crisis. That's when Jaffee came up with a plan to facilitate the sale of the property to a buyer who could convert the property.
Jaffee developed an interest in affordable housing after being invited to a workshop on homelessness in 2019, where he learned about the housing shortage in Orlando and other cities across the country. Jaffee knew his experience in commercial real estate could help. By this point, he had heard about One Stop Housing, a Sarasota, Florida-based company dedicated to converting hotels into functional and cost-effective apartments in the Southeast. So Jaffee reached out to the company and presented the idea of purchasing the hotel, which was not listed for sale at the time, as an opportunity that aligned with the company's mission and could help his city's housing crisis.
Now Jaffee had a buyer, but there were still challenges to overcome besides the fact that the property was old and in need of major repairs and improvements. The building was leased to an operator at the time, and the owner had no intention of selling. Jaffee would not be deterred; he cold-called the owner about putting the property up for sale, a conversation that lasted nearly two years before the owner accepted a price that they felt reflected the property's value. One problem: That price was too high for the buyer's conversion model to pencil out.
The affordable housing crisis was still impacting Orlando. Central Florida currently ranks as one of the worst in the country when it comes to access to affordable housing, so Jaffee explored a non-traditional solution that could satisfy the buyer and seller — he approached the city of Orlando to explore a partnership where the city would contribute funds to help the purchase price make sense. His efforts were successful. Through the partnership, the city agreed to contribute to rehabilitation efforts for the property, including removing asbestos, upgrading the PTAC system to meet energy codes, and installing new energy-efficient windows, entry walls and doors, energy-efficient refrigerators and low-flow faucets and toilets.
The final piece in bringing the sale across the finish line was the property’s zoning, which was designated for hospitality use but not permanent apartments. In July 2022, the buyer successfully rezoned the property for multifamily use to allow for more density and studio apartments under 500 square feet. Now with the Ambassador hotel in the hands of the new owner, it will be redeveloped into 150 low-income apartments featuring a mix of studio, one- and two-bedroom units.
When the Palm Garden Orlando Apartments are completed in mid-2024, the completely gut-renovated property will become the eighth hotel conversion project the company has finished.
About the deal: In an off-market sale that closed in November, One Stop Housing acquired the Ambassador Hotel in Orlando for nearly $7.15 million, or about $48,000 per room, from Sun-Beach Investment Co., which had initially acquired the property in 2002 for just $1.92 million, according to CoStar data. The two-story, 52,390-square-foot building is located near North Orange Blossom Trail, west of Interstate 4.
What the judges said: Many judges in the market, including Aaron Dan, Laurie Botts, Gregg Ickes, Greg Morrison and Tara Tedrow, cited the creative vision, project size and deal complexity required to convert this aging infill property into something desperately needed in the market and the impact it would have on the local community.
"The sale of the Ambassador Hotel for conversion to affordable/workforce housing is a site that could have easily been acquired by an entity with intentions to continue to operate it as a low-cost hotel. The vision of the brokerage firm to recognize the opportunity for the site to be converted to affordable/workforce housing is commendable," said Brooke Bonnett, director, economic development department, city of Orlando. "The conversion will positively impact those most in need within our community by providing a safe and affordable housing option. The surrounding neighborhood will benefit from the capital investment being made to the property."
"This is the story that needs to be told, the one we all want to hear and all those working in and supporting affordable/attainable housing want to participate in," said Isaiah Cottle, president and CEO of Green Slate Land and Development. "The perseverance shown was tremendous and the innovative approach in which the city was willing to participate is an example of the direct monetary participation we need from our local governments to begin to tackle this issue."
They made it happen: Glen Jaffee, senior director with Cushman & Wakefield of Florida; Mark Vengroff, managing partner with One Stop Housing; Albert Segev, owner of Sun-Beach Investment Co.
