Exclusive | First look at landmark Tri-Cities hotel’s 2nd life as tiny apartments
What exactly is a micro-apartment, and why is an Oregon company investing more than $100 million in developing them in the Tri-Cities?
Over the past year Fortify Holdings has been buying up low performing hotels across the Tri-Cities, with the goal of turning each into upscale micro-apartment communities.
Last week the company gave the Tri-City Herald a tour of one of the projects, and shared their vision for the community.
Tri-Cities ties
Regional Manager Robert Jacobs said that when Fortify began looking for investment opportunities in Eastern Washington, they started by putting together a team of lifelong Tri-Citians.
First they brought in Jacobs, then added his brother Daniel and cousin Brett to their team. Robert Jacobs is a CPA by trade, and Daniel is an aerospace engineer, who most recently lead a team working on F-18 fighter jets.
They credited their father’s career in development with instilling in them a passion for real estate.
The company began snapping up Tri-Cities hotels last summer, with five already undergoing renovations.
They’re also waiting to close on buying two waterfront properties, the Riverfront Hotel on George Washington Way in Richland and the Clover Island Inn in downtown Kennewick.
Jacobs said those properties will be footholds in larger developments if they’re able to convince the city of Richland and Port of Kennewick to sell the land the hotels sit on. Both deals have a closing deadline of March 31.
“We would love to make the Clover Island and Riverfront properties vibrant parts of the community that the public can enjoy and go to a brewery or an amazing restaurant,” Daniel Jacobs said. “We want to go and enjoy those awesome spaces as well.”
The brothers are serious about building community in the Tri-Cities, having also recently become co-owners of Amendment XXI bar and grill in Richland.
Tri-Cities residents will begin to see micro-apartment communities opening in late this summer or early fall, Jacobs estimated. He wasn’t ready to release what the units will rent for, but said they will be offered at market rate and would be not eligible for housing subsidies.
The first to open will likely be The Q — the old Kennewick Quality Inn — and The Franklin — formerly the Best Western Plus Columbia River Hotel in Richland.
The Franklin
Located just past the Uptown Shopping Center in Richland, The Franklin is a six-story, 200-room hotel with extensive commercial space.
The entire first floor of the building is zoned for commercial use, and will be transformed into dining, shopping and event space open to the public.
An Italian restaurant named La Bella Vita Kitchen and Bar is expected to open ahead of the apartments also later this year.
The first floor also will feature a coffee shop, business offices and conference room rentals. Fortify intends to keep its Tri-Cities offices at The Franklin, as well.
The crown jewel of the public space is the large indoor pool with a two-story water slide.
Jacobs said the entire area will be revamped with new decking and furniture, as well as space for parties and events. Next to the pool area is a large conference room that they intend to renovate as an event venue.
“Wherever Fortify exists, across their portfolio, we always try to create a sense of community,” Jacobs said. “It’s an overall better living experience for the residents when you have a really vibrant community that everybody feels like they’re a stakeholder in.”
Other smaller conference rooms will be used for community spaces for residents and the public. Jacobs said at some of their other properties these spaces include fitness centers, small movie theaters and more.
They also plan to take three large rooftop areas and turn them into open air event and community space.
Jacobs said all of their units are pet friendly, and they hope to add a dog wash station for residents at The Franklin.
“That just speaks to a larger philosophy Fortify has, which is trying include as many amenities as possible,” Jacobs said. “These are studio apartments, so (those amenities) give residents common places to utilize more of the property than just their apartment.”
All of their properties feature artwork and architecture unique to the aesthetic of the community, he said. Some examples include murals or art that spans the length of the building. What that will look like for each Tri-Cities site has yet to be determined.
Apartment amenities
Fortify specializes in studio and 1-bedroom apartments ranging from 300 to 500 square feet. All of the units at The Franklin will be studio apartments.
Most of the rooms will fall in the 300-square-foot range, renovated from standard hotel rooms. Some of the rooms that were hotel suites will be larger.
As residents enter the apartments they will find a fully tiled bathroom with new cabinets and fixtures. The kitchen and living area also feature new fixtures, as well as a two burner induction cooktop and a convection oven and microwave combo to maximize counter space.
The living area is separated by a partition from the sleeping area, which is large enough to accommodate a queen-size bed. All units have patios with views of either the river or surrounding city and hills.
Why Tri-Cities
Fortify believes that the housing market in the Tri-Cities is near a crisis, and wants to invest in these small, upscale units to ease that pressure.
The most recent data from Rent Cafe, which compiles apartment related data, shows that for every apartment currently open in the Tri-Cities, there are 18 prospective renters.
The company operates about 6,500 units across 65 properties in Oregon, Idaho, Nevada and Washington. They boast an average 98% occupancy rate across all properties.
Their goal with renovating hotels is to minimize impact and the need for new construction, and to maximize value to residents.
Jacobs pointed to a widely reported 2020 study by the Runstad Department of Real Estate at the University of Washington, which showed that the Tri-Cities is one of the most difficult markets in the nation to rent or buy, with apartment vacancy rates hovering around 3%.
At the same time, builders in the Tri-Cities are having trouble keeping up with the demand for new homes. According to the Tri-City Association of Realtors, homes spent less than 20 days on average for sale in the Tri-Cities in December.
The average price homes were sold at was $446,000, up nearly $100,000 from the December 2020 average price of $358,000.
The median price rose by $67,700 over the year.
“The data really speaks to the need in the marketplace for housing, and that’s really what drives our property decisions,” Jacobs said.
The company has been donating the old hotel furnishings to nonprofits such as Habitat for Humanity.
This story was originally published January 23, 2022 at 12:55 PM.
