Foundation 8 has acquired the troubled Sheraton Crescent hotel in Phoenix and is planning a large-scale multifamily conversion and expansion on and around the site. The 342-room hotel property had been closed and in receivership for three years before the purchase. Foundation 8 bought the asset out of receivership for $9.25 million, positioning it as the basis for a new residential community.
Initial plans described by the group call for converting the hotel component into apartment housing. One statement indicates that the team plans to convert the former hotel units into 1,786 apartments, while another plan element specifies investing in a conversion of the existing building into 258 apartment units, followed by additional ground-up construction on surrounding land. The available information does not reconcile these differing unit counts, but together they underscore the scale of the contemplated residential program.
Foundation 8 is joined on the project by Trillium and Gia Hospitality, which are described as part of the team that will participate in the repurposing effort. The redevelopment is centered around Metropolitan, the newest incarnation of the former Metrocenter Mall, with the Crescent positioned as a key residential component in the area. The apartment community created from the hotel will be renamed the Crescent as part of the repositioning.
The redevelopment plan includes leveraging the hotel’s existing physical infrastructure. The property currently offers two swimming pools, two tennis courts, two restaurants with adjacent full kitchen facilities, a fitness center, a business center and 10 meeting rooms totaling 18,950 square feet. These amenities are expected to provide a base for creating a competitive multifamily community as the building is converted from hospitality to residential use.
Plans call for an investment of $120 million to execute the conversion of the Sheraton Crescent building into apartments, with three additional residential buildings envisioned on land surrounding the existing structure. Beyond the Crescent itself, the group indicates that it expects to develop numerous other nearby rental communities, with the broader investment program in the area cited at approximately $400 million.
The acquisition out of receivership, the substantial planned capital investment and the focus on repositioning a long-closed hotel into rental housing highlight how investors are looking to reuse underperforming hospitality assets in this part of Phoenix.
