Sunburst Hospitality Corp. is giving up on a Courthouse hotel-to-condo conversion that it has been planning for more than five years.
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The Howard County-based company in 2019 applied to convert the 187-room Arlington Court Suites Hotel into 180 residential units. Sunburst received approval in October 2020, but it was never able to get the project underway.
Now, it has enlisted KLNB and HREC Investment Advisors to sell the nine-story property at 1200 N. Courthouse Road, according to marketing materials. KLNB is pitching the property to buyers interested in a conversion, and HREC is marketing it to investors who would rather keep it as a hotel.
“If you’re looking for immediate cash flow with brand flexibility or a[n] approved multifamily conversion opportunity in one of the nation’s most supply-constrained urban markets, this checks the box,” KLNB Senior Vice President Justin Shay posted on LinkedIn.
Sunburst Vice President of Acquisitions and Development Chris Milke confirmed in an email that it has put the property on the market but declined to comment further.
Sunburst was still planning on going forward with the conversion as recently as January, when it asked county planning officials for more time to begin construction, citing “unfortunate economic circumstances that make any development projects in the region challenging,” the Washington Business Journal reported at the time.
The Arlington Court Suites Hotel, built in 1963, spans 219K SF and sits on 2.3 acres. It initially operated as an apartment building until it was converted into a hotel in 1980. The hotel carries Choice Hotels International's Clarion flag, but the marketing materials say the property is unencumbered by brand.
Sunburst acquired the property in 2006 and in 2007 completed an $18M redevelopment, according to its website.
It sits next to the 252-unit Vista on Courthouse apartment and townhouse complexes that Sunburst completed in 2008 and sold in 2010.
Sunburst operates two other hotels in Northern Virginia: Quality Inn Tysons Corner and Suburban Studios Tysons Corner, as well as two in California, according to its website, which also says the company has “developed residential real estate and golf projects in Virginia and Arkansas.”
The company is an affiliate of Park Silver Development, which was founded in 2019 with capital from the Bainum family and pursues opportunistic real estate investment and development opportunities in the U.S. The Bainum family founded the company that became Choice Hotels, and Stewart Bainum Jr. serves as the North Bethesda-based hotel chain's chairman.
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