The sudden pandemic outbreak has altered the way we live today. It has adversely impacted the global economy, the employment status of people globally, and major industry verticals says Maxwell Drever. The hotel industry’s fate has changed to a huge extent because of the pandemic. Even though it’s true that the hotels that had incurred ample loss at the face of the pandemic outbreak is getting back into operation, due to the traveling revival and vaccination campaigns, a massive chunk of hotels are still dealing with losses. And the only hope to the desolate future of these hotels. Is to find a way to use the property fruitfully. And here, the obvious option is to get it converted into a low-cost housing system. So that it can act as a shelter for the workforce population.
The best practices to consider
However, just because a hotel is not in use and incurring losses doesn’t mean. It qualifies as a potential asset to be converted into an affordable workforce housing unit. Maxwell Drever says there are ways to evaluate this. And some of the practices that can help at arriving at the best decision are:
Check if the rewards are more than the risk
There is always a risk involved when you are converting hotels to put it into an alternative use. Hence, it is necessary to carefully assess. If your rewards are more than the risk factors. The hotel owners and investors need to evaluate their tolerance for the conversion-linked risks and consider the accessibility. As well as capital cost for the objective in the current market scenario. Based on the structural alterations required, it is necessary to determine the conversion timeline. Because it will affect the investment outcomes. Also, there should be an in-depth evaluation of the multiple alternative-use strategies to determine. If the conversion benefits are more than the inherent risks. And since the pandemic outbreak has affected the real estate market. It’s a smart call to speak to the professional and financial service expert. Who specializes in commercial real estate for the conversion.
Check if the hotel has the correct bones
It is essential to consider a hotel’s physical structure and layout, along with its market positioning. When you are considering a conversion. Usually, extended-stay hotels are considered a better asset. For getting converted into affordable workforce homes as they already have kitchenettes. However, there is a need for vast plumbing work for expanding them into complete kitchens. That aside, the complete service hotels are usually bigger in size that has an increased number of guestrooms. It is significant but generally underutilized, offering increased sellable and rentable square feet when converted for another use. Maxwell Drever says that it is essential to assess the layout of a hotel. And evaluate the amount of sellable and rentable square feet that can realize after the conversion.
These are some of the best practices that are essential to decide. If a hotel is in good shape for getting convert into an affordable workforce housing unit. However, it is also a good practice to involve a property inspector in the process.