Downtown Atlanta Ramada Set For Conversion Into Apartments
An Atlanta developer is moving forward with plans to transform a defunct convention hotel into a mixed-use apartment complex, which may be heralding a trend in Metro Atlanta as escalating development costs make it harder for builders to offer affordable housing.
Atlanta-based Pellerin Real Estate filed for a construction permit with the city of Atlanta on Oct. 29 to start construction on the adaptive reuse of the shuttered 375-room Ramada Plaza Atlanta Downtown Hotel into an apartment building over retail.
Pellerin plans to convert the property into 249 micro-unit apartments and a 13K SF food hall, an outdoor promenade, coworking space, restaurants and a rooftop pool and clubhouse, the Atlanta Business Chronicle previously reported.
“As construction and land costs continue to rise, communities and developers will need to find more alternatives to provide affordable housing,” Ladon Haddow, the managing partner of Haddow & Co., one of the cities' most prominent multifamily consulting firms, told Bisnow in an email.
Micro apartments are defined as any units 500 SF or less, according to Haddow & Co. In Metro Atlanta, the average micro-unit size is 467 SF compared to the average single-bedroom apartment size of 718 SF. They account for 2% of Atlanta's one-bedroom Class-A stock, according to Haddow & Co., but more are in the pipeline at the Lofts at Centennial Yards South and planned at 1382 Peachtree St. and 678 Edgewood Ave.
According to Haddow & Co., Pellerin plans some units to be as small as 330 SF. Pellerin didn't respond to requests for comment.
Pellerin is known for other adaptive reuse projects in Atlanta, such as The Beacon in Grant Park — a 110K SF mixed-use development along the BeltLine's Southside Trail — and The Marbut apartment project in the East Atlanta Village. The developer purchased the 232K SF former Ramada at 450 Capitol Ave., for nearly $14M through an auction with Ten-X in October 2020.
After its purchase, Pellerin removed the Ramada Worldwide by Wyndham as the hotel's brand and tapped New York-based Life House to run it as a private-label hotel called The Atlanta Downtown Summerhill Hotel, given its proximity to the revitalizing Summerhill neighborhood. Life House Managing Director Bryan Dunn told Bisnow via email this week that the hotel was "temporarily closed for renovation," but declined to comment further about the project.
"I am under a confidentiality agreement and cannot comment on Pellerin's plans for the hotel," Dunn said.
Pellerin is executing on the strategy investors in other cities are trying in an effort to kill two birds with one stone: turn a struggling hotel into much-needed housing priced below what new construction necessitates. Haddow said the firm expects more developers to consider hotel conversions in the future, especially into micro-unit projects.
“Hotel conversions provide a great opportunity to keep the absolute rents low due to the smaller unit sizes,” he said.
To date, hotel-to-apartment conversions have been a rarity in Metro Atlanta. The Savannah College of Art & Design purchased a former hotel next to its Atlanta campus in 2017 and turned it into student housing, according to Haddow & Co. The building was later razed to make way for a newer student housing project.
In 2014, Columbia Residential, led by the late Noel Khalil, redeveloped the former Imperial Hotel into senior affordable apartments. The city of Peachtree Corners — 21.5 miles north of Downtown Atlanta — recently passed an ordinance that allows the owners of the 13 city-located motels and hotels to convert their properties into housing. The ordinance followed concerns raised by city officials that declining hotels would add to crime and transient housing, The Atlanta Journal-Constitution previously reported.
“Rather than having empty buildings, we’re creating a way for impacted hotels to find another use,” Peachtree Corners Mayor Mike Mason told the AJC. “It offers another alternative to hotel owners, rather than bankruptcy, and keeps jobs and spending in the community.”
The conversions haven't unanimously been met with open arms. In June, the city of Sandy Spring rejected PEG Cos. plans to convert a Hawthorn Suites extended-stay hotel into apartments.
Haddow said transforming the former Ramada into housing is an ideal fit for the Summerhill neighborhood, one that has been on a redevelopment spree since 2017 when Carter and other development partners acquired 83 acres at the intersection of Interstates 85 and 20. Georgia State University, just a year before, purchased the former Atlanta Braves stadium at Turner Field for the university's own stadium, starting the redevelopment momentum in Summerhill.
“There is certainly room for more of this product in the urban core,” Haddow said. “Micro units in this area should do well. The project should benefit from the GSU population and nearby job centers like Grady Hospital.”
Since 2017, developers have delivered 565 Hank, a 306-unit Class-A apartment project as well as the Georgia Avenue retail redevelopment strip, with retailers Wood's Chapel BBQ, Junior's Pizza, Halfway Crooks Beer and Hot Dog Pete's. Texas-based Aspen Heights also developed an off-campus student housing project.
“It's an important piece to Summerhill,” Carter Executive Vice President David Nelson said. “Bringing coworking space we think is something that is needed in Summerhill. Right now it's just a closed hotel. Bringing life to it and bringing it back to the neighborhood ... we're excited about that.”