A developer and a senior living company are working together to create a place to live for essential workers by buying a hotel and converting it into studio apartments.
While hotel conversions are a trend in senior living, development company K2 Developers and senior living operator Moorings Park Communities are betting hotels can be a good solution to a workforce housing shortage in Naples, Florida.
Steamboat Springs, Colorado-based K2 Developers is teaming up with Moorings Park to buy a Super 8 Hotel for $9.6 million in an all-cash, off-market deal. The hotel is located within 15 minutes of Moorings Park’s three life plan communities, and is set to be the first fully dedicated housing project for Moorings Park workers.
Moorings Park plans to lease out a block of 16 units in the hotel and rent them to workers with rates at $1,200 per month for single renters and $1,400, or $700 apiece, for renters with a roommate.
“For us long-term, we see this as just another employee benefit [that] we’re going to have to fold into our employee structure,” Moorings Park Communities CEO Dan Lavender told Senior Housing News.
As far as rental rates in the Naples area go, “there’s nothing even in that stratosphere,” Lavender said. He added that one-bedroom rates in the area might start at around $2,200 per day.
Moorings Park is set to share the converted Super 8 hotel with NHC Healthcare System, a local hospital network that is leasing 20 units for its workers. Roughly half a dozen other companies are also leasing room blocks for workers.
The health network recently surveyed its workers and found that 40% needed to commute 45 minutes or more to work. That is also an issue in the senior living industry, particularly as developers locate communities in urban areas with a high cost of living.
Workforce housing is not common in senior living. But, should the project in Naples go well, Moorings Park will be looking to replicate its success elsewhere.
“If we lease up these 16 units, and the building is sold out … and we see excess demand, we would do it again with another hotel,” Lavender said. “And if we don’t see that, we’re going to continue to try other alternatives [to] add this to our portfolio of benefits that we can offer to employees.”
Naples, Florida-based Moorings Park has in recent years looked for ways to house its workforce, including a development project on a nearby golf course.
The need for more affordable housing for essential care workers is becoming increasingly urgent in Collier County, where Moorings Park is located. Recent research by Bright Community Trust showed that Collier County is about 10,000 units short to meet the need for affordable housing in the area.