Converting a hotel to apartments requires scrapping the old expense model entirely. Hotel costs like franchise fees vanish, but apartment expenses like payroll and utilities must be fully budgeted. This property's $200 nightly rate and 2025 occupancy drop pushed the asking price down from $19 million to $15 million.
Are you locking up deals in the deal room? Not like— again, what's the— we already know the saturation and absorption rate down there, don't we? The NOI quality. Again, like the current expenses include hotel specifics like franchise fees, room supplies, food supplies, commissions, but those disappear on the apartment side. But payroll, utilities, insurance, taxes, repairs, management all matter and they come in. You need a true apartment expense reset, not just a hand wave. So occupancy declined. The hotel operation showed a meaningful decline in 2025 because people just aren't staying there that way. Uh, rents are too— I'll tell you right now, the rents are too high. They're charging $200 a night for that shit in that area. Yeah, so it's horrible. So if you were able to increase your— if you were able to increase your, your, uh, occupancy and adjust your price. It could make a difference. So the go, no-go, conditional no-go at $19 million today. Blah. All right. So now we know that it's worth $15 million. All right. Now we know this property is actually being offered at $15 million. Just let me know what we are looking at financially so I can see if we're gonna cut this or let it go.
