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Seedy Atlanta Inn to Become Bunkhouse

Hip Austin Hotelier Will Rehab InTown Suites With Help of $43 Million in Bonds
February 27, 2018
The InTown Suites across I-85 from Armour Yards won't be a high-profile eyesore much longer.

Atlanta developer Paces Properties has partnered with Austin, TX-based Bunkhouse to redevelop the mid-century modern inn. Hotelier Liz Lambert, who created Bunkhouse, said the team will convert the motor-court hotel to a boutique hotel with 162 keys. For its part, Paces Properties will develop 48 commercial studios as part of the rehab.

Commercial property owners in the direct vicinity are praising Paces' plans to convert the InTown Suites to boutique hospitality and commercial spaces.

"It's going to have a huge impact on the neighborhood," Perennial Properties CEO Tim Schrager tells CoStar News. Perennial owns 11 acres across Piedmont Circle, including the Midtown Bowl and Monroe Place apartments.

"Right now, InTown Suites is probably the worst-run business in the neighborhood. If we can remove the worst element in the neighborhood, that's a big positive," Schrager said.

The extended-stay hotel stands in the way of the commercial development wave washing over the immediate area. InTown Suites sits on a hill overlooking the interstate and Armour Yards, an old industrial market that's now the darling of creative and tech companies. On any given night, homeless people can be seen wandering around the site.

Paces Properties purchased the hotel and 3.5 acres at 1944 Piedmont Circle in July 2016 for $8 million, and the hotel has continued to operate since. In December 2017, Paces transferred the official deed to the Development Authority of Fulton County (DAFC) as part of a bond-for-deed deal. In return, DAFC will issue $43 million in bonds to help finance the rehabilitation of the hotel. The deed would be returned to Paces upon repayment of the bonds. DAFC CEO Al Nash confirmed today that his group is considering the bond issuance.

Bunkhouse, whose developments include Hotel San Jose, Hotel Saint Cecilia and Austin Motel in Texas, is raring to get going to work on the Atlanta property. "[Atlanta is] an amazing, dynamic city, and we look forward to immersing ourselves in the community here." Lambert said. "It's a rare opportunity to reinvent a classic mid-century motor-court hotel - there aren't many left in the country - and we can't imagine a better partner in the project than the Paces team."

Paces is the team behind the wildly popular Krog Street food-and-entertainment hall that's being copied across the city and greater Southeast. It also is redeveloping the Atlanta Dairies plant on Memorial Drive and recently sold The Office, an apartment tower downtown, for an incredible price.

"They've got a great concept" for the site, Perennial's Schrager said of Paces and Bunkhouse. "With all of the businesses here and redevelopment of Armour Yards, there's got to be a demand for a boutique hotel."

Paces will work with Action Missionaries to help find new homes for long-term tenants of InTown Suites, Paces principal Merritt Lancaster said. "With the help of Action Missionaries, we hope to demonstrate that redevelopment can be executed thoughtfully from the standpoint of both current and future users," Lancaster said.

Construction on the yet-to-be-named hotel by Bunkhouse will commence in the second quarter. The hotel should open in 2019.

Tony Wilbert, Atlanta Market Reporter  CoStar Group   

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