Kissimmee, FL (Orlando, FL MSA)
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Vivo Investments, LLC
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Targeted Hold Period:
86 Apartments Units
* There is no guarantee that targeted returns will be achieved or that preferred return payments will be made.
Fairway America Management Group IV, LLC (“Fairway”) and Vivo Investments, LLC (“Vivo”) (collectively, the “Co-Managers”) intend to acquire a suburban midscale hotel (the “Property”) currently operating as a Wyndham Hotel in Kissimmee, Florida, and convert it to 86 apartment units (the “Project”).
The Co-Managers have acquired over 20 projects together as part of an opportunistic strategy to acquire functionally obsolete hotels at an attractive all-in cost basis in undersupplied markets, and then convert them into competitively priced studio, one- or two-bedroom apartments. Once the conversion of the Property is complete, the Co-Managers intend to refinance or sell the Property.
- Well-Located to Meet Renter Demand: The Property is conveniently located approximately 8 miles from Disney World, the largest single-site employer in the US with over 75,000 employees. The area has seen job growth of +6.2% in the last year following the reopening of tourist centers and attractions near Kissimmee.1
- Shortage of Workforce Housing: A housing study in 2019 identified Kissimmee as having “the greatest lack of affordable housing in the United States, beating out bigger metro areas like Los Angeles and Las Vegas.”2 Since then, Class B rents in Kissimmee have seen notable rent growth, reporting a +23.1% year-over-year increase in 2022.3
- Conversion Cost Below Similar Properties: The Co-Managers believe that the all-in cost of conversion will be significantly less than the price that similarly renovated apartments have recently sold for. The all-in costs of the Project are estimated to be $173,953/unit, while the average market sale price is $230,000/unit.3
- Synergies With a Nearby Property Acquired by the Co-Managers: The Property is located approximately 0.6 miles from another hotel conversion asset recently acquired by the Co-Managers (223 proposed studio units). In contrast, the Property is proposed for 100% one-bedroom units, which the Co-Managers expect will provide prospective tenants optionality and appeal to a broader tenant demographic. This also provides an opportunity for a potential portfolio exit.
3 CoStar Analytics Class B Multifamily Statistics, March 2022