STERLING REAL ESTATE PARTNERS ACQUIRES SCOTTSDALE HOTEL FOR APARTMENT CONVERSION
Scottsdale-based investment firm, Sterling Real Estate Partners, recently acquired Suites on Scottsdale in an off-market transaction with plans to convert the hotel into market rate apartments. Originally built in 1996, the 114-room extended stay hotel will be transformed into a luxury, 85-unit apartment community. The property is centrally located in one of Scottsdale’s most affluent sub-markets, positioned on the corner of Scottsdale Road and Mountain View Road, just south of Shea Blvd. This acquisition marks Sterling’s second adaptive reuse project.
“The location of this property could not be better. There are not many corner locations at prominent intersections on Scottsdale Road,” said David Zeff, President of Sterling Real Estate Partners. “We are excited about the value proposition. We will be delivering essentially new product at a significant discount to replacement cost.”
This is Sterling’s fifth acquisition in the last 6 months, totaling more than $60 million. Sterling had the property under contract since December of 2020 while it processed a change in use from hospitality to residential. “We took a risk during COVID and are delivering value to our partners,” noted Zeff. Sterling plans to begin development of the new apartments in summer of 2022 with completion estimated for the first quarter of 2023.
The conversion will consist of modifying the existing structure to conform to Scottsdale building codes. This will include new balconies for every unit, enhanced curb appeal, and select rooms combined to improve the unit mix. New resident amenities will feature a large conference room with workspace-style offices, a state-of-the-art indoor/outdoor fitness center, yoga studio, movie theater, dog park with pet washing station, resort style pool, automated package locker delivery system, smart access system, and more. Lea Ann Scofield, Sterling’s Director of Asset Management, added, “We have designed this community to meet the desires of the high-quality tenant we know this location will attract.”
The Suites on Scottsdale is located between Old Town Scottsdale to the South, the prestigious Paradise Valley neighborhood to the West, McCormick Ranch to the East, and the Scottsdale Airpark Employment Corridor to the North, boasting nearly 90,000 jobs. Residences will consist of luxury one-, two-, and three-bedroom units ranging from 450 to 1350 square feet. Site amenities will be redesigned during the conversion along with various upgrades and additions throughout the property.
Dinesh Rama of NewGen Advisory brokered the transaction for the 114-room hotel.