Converting Hotels to Multifamily

[Petro B.]

It looks like the hotel industry would not fully recover for a long time, so what are your thoughts about converting hotels to multifamily? It seems there could be an attractive entry point in this environment. Concentrating on the extended stay hotels that have studio/1-/2-bedroom units with kitchenette could minimize conversion costs. I guess zoning could be an issue, and specific local market conditions could play an important role (not everyone would want to live next to an airport!).  

[Rick Martin]

You are correct @Petro B. and it is already happening. I also see that there is a shortage of housing, and there will be a surplus in commercial office space. Could some of these be converted to living space, al la Tokyo (tall, small square footage living spaces). The world is changing. Who knows for how long. There is a neighborhood in LA that people pay $1.3M to live in, and it borders LAX, an oil refinery, and a sewage treatment plant, so where people are willing to live may surprise you.