By Kate Snyder
A recent hotel deal is highlighting some signs of life in Tacoma’s hospitality market. In a recent sale, an American Lodge motel was purchased for $11.5 million, or approximately $80,985 per room, by an entity affiliated with Sage Investment Group, according to Pierce County public records. The seller was an entity affiliated with Tacoma 142 IPM, LLC, which is based in Seattle.
The property is located at 8702 S Hosmer St. on 3.2 acres and totals about 44,467 square feet. According to Redfin, the two-building property was constructed in 1978 and features “walk-up” style construction with exterior corridor unit access. Both buildings had also recently undergone a major exterior renovation, which included the installation of brand new roofs and a new exterior paint job. The electrical system was also upgraded to add small kitchens/kitchenettes in all the rooms.
Redfin also stated that the property was in the process of being permitted for a change of use to residential space.
“The American Lodge presents investors with a rare opportunity to convert a 142-room motel into a market-rate multifamily property,” Redfin’s website states about the property. “With the current lack of affordable housing supply, this property is positioned to benefit from conversion to multifamily.”
Any plans to develop the property have not yet been released.
Sage Investment Group is a real estate investment and development firm with offices in Kirkland and Richland, according to the company’s website. The firm manages a more than $50 million portfolio of real estate holdings across the United States. The company’s focus is on “acquiring off-market value-add apartments and repositioning these assets to achieve the highest yield.”
In the past six months, Tacoma has seen some sales activity in the multifamily market.
In one deal last year, the Low Income Housing Institute paid $22.5 million, or about $274,390 per unit, for The Heron apartment building. The property was sold by Emerald Bay Apartments LLC, an entity linked to Deer Harbor, Wash.-based Chris Robison. The Heron is located at 1624 E 32nd St. and offers 82 studio and one-bedroom apartment units.