Chicago-based AJ Capital Partners has acquired President Hotel Apartments, formerly Hotel President, in downtown Palo Alto. The sales price was not disclosed. The six-story building on University Avenue, currently a mix of retail and apartments, will undergo a renovation to convert it into a Graduate Palo Alto, part of the Graduate Hotels collection.

The hotel will offer 100 rooms, a lobby coffee shop and ground-floor retail and restore the original rooftop garden. The company plans to preserve the facade and interior historic elements. AJ Capital will use LoanCore Capital to finance the project. The hotel will open in 2020.

A hotel tax increase could impact future room rates. The city council voted in early June to place a hotel tax increase on the November ballot, which would raise the hotel tax from 14% to 16%, Palo Alto Online reports. Funds would go toward infrastructure improvements.

Increased construction activity across the Bay Area has led to increased construction costs and a funding gap of $76M for infrastructure in Palo Alto. A recent survey suggests the tax increase has a strong likelihood of passing.

The property currently houses 75 apartments with 70 studios and five one-bedroom units, the San Francisco Business Times reports. Residents will be provided with $3K to assist with moving expenses and the company will provide a local relocation expert. Tenants have until Nov. 12 to move out.

The building was completed in 1929 and served as Hotel President, named to honor President Herbert Hoover, who was one of the first students to enroll in Stanford University. It was one of the first hotels built in Palo Alto, AJ Capital Partners founder and CEO Ben Weprin said in a statement.

There are 11 Graduate Hotels open in the U.S., including The Graduate Berkeley, and another nine hotels are under development and planned to open by 2020.