A Gaithersburg hotel is in the process of being converted into an apartment community for senior citizens.
HH Venture LP, a Maryland limited partnership led by El Segundo, California-based real estate investment firm MRK Partners, purchased the Hyatt House Hotel in Gaithersburg last fall for $19 million and is converting the 140 rooms into apartment units designed to be affordable for senior citizens.
Now called Hillside Senior Living at 220 Skidmore Blvd., the property currently has about 25 residents, said Chris Beckwith-Taylor, vice president of marketing for property manager Franklin Johnston Group. He says they anticipate all 140 units to be constructed and filled by November. The renovation costs are more than $6.5 million.
“Montgomery County is one of the wealthiest counties in country but there was such an extreme need for affordable housing,” Beckwith-Taylor said.
Mike Muldowney, executive vice president at real estate investment firm CBRE, consulted in evaluating the market opportunity for an affordable senior living community and found that while there was some risk in attempting to compete with market-rate developers, many seniors looking for housing in Montgomery County were either priced out or stuck on two- or three-yearlong waitlists, according to Beckwith-Taylor.
Hillside’s current rates are $1,195 for a one-bedroom apartment and $1,395 for two bedrooms. The current median rental price in Montgomery County for a one-bedroom unit is $1,722.50 and $1,967 for a two-bedroom, according to Zillow.
Potential tenants of Hillside must be at least 62 years old and earn between $40,0000 and $70,000 a year. Rental rates are also kept stable under a senior group home subsidy.
“We’ve started to see folks who were on the waitlist for surrounding competitors come to us,” Beckwith-Taylor said.
While the complex does not provide assisted living services, it does bring in outside resources such as local medical services to perform blood-pressure testing and go over residents’ existing medications.
Article courtesy of Washington Business Journal
About the Franklin Johnston Group
Based in Virginia Beach, The Franklin Johnston Group develops and manages luxury, senior and affordable housing for themselves and a select group of strategic partners. The group has more than 14,000 units and 85 properties under management in seven states along the east coast. Total assets managed by the group exceed $1.8 billion with an additional $200M worth of development currently underway. For more information about The Franklin Johnston Group, visit www.thefranklinjohnstongroup.com.