Sage Investment Snaps Up Another Seattle-Area Motel

Sage Investment Group has added another lodging property to its holdings with plans to turn it into housing.

The Kirkland-based developer acquired a former Motel 6 at 1885 15th Place Northwest in Issaquah for $9.7 million, or $94,174 per room for 103-key property, the Puget Sound Business Journal. The seller was an entity tied to Bellevue-based PMF Investments.

The sale price largely aligns with the motel’s assessed value of $9.8 million, according to county records cited by the Business Journal. The 27,500-square-foot building last sold in November 2020 for $5.5 million and previously changed hands in 2012 for $7.3 million.

The 1.9-acre property marks Sage’s first foray into Issaquah. The company expects to begin renovating the 1978-built structure this summer. The existing guest rooms will be transformed into 103 studio apartments with in-unit kitchens, on-site laundry facilities, a club room and an outdoor patio.

Budget hotels appear to be Sage’s asset class of choice when searching for properties to convert into housing. In September, the firm arranged another deal with PMF Investments to acquire the three-building Motel 6 in Kirkland for $15.2 million. That same month, the firm completed the acquisition of a 39,600-square-foot Econo Lodge in Everett for $9.5 million, Connect CRE reported. That site will be converted into 124 studio apartments. Prior to that, the company bought a Studio 6 hotel in Mountlake Terrace in another deal with PMF Investments for $12.1 million.

“As somebody who was born and raised here, I want to keep people here, I want people to be able to afford to stay and I want people to be able to afford to move here,” Sage co-founder Emily Hubbard previously told the Business Journal of the firm’s acquisition and housing conversion strategy.

Construction costs for new housing remain prohibitively high for some investors, making conversion an increasingly attractive option for housing developers, whether it be in motels or other types of properties such as offices or retail. Earlier this month, Building Reimagined, a partnership between architecture firm Clark/Barnes and contractor BNBuilders, proposed building a 21-story, 340-unit residential tower at a decommissioned Ross Dress for Less site in downtown Seattle.

Sage owns about 2,900 units across 31 properties, according to the Business Journal. — Chris Malone Méndez