Any ideas what to do with vacant land sitting behind a hotel?

We got about 1.25 acres of vacant land behind a hotel. It's in a town with around 50k people and about an hour away from a major metro. It's really a highway market more than anything else. No real major industry there. The parcel is sitting behind a hotel. The site actually sits on a highly trafficked road (50000 ADT). The site was meant to develop a second hotel, but the hotel market is pretty bad. We're trying to maximize what we can do with it. We spoke to restaurants and other businesses trying to do a NNN, but unfortunately, since its limited visibility, they won't do a ground lease. Also thought about doing a conference center to compliment the hotel, but after some due diligence, saw that most meeting/conference centers are sitting empty the majority of the year in the town. Another option is self-storage.

Any creative but realistic ideas we can implement?

Comments (26)

  • Analyst 2 in RE - Comm
Jan 10, 2021 - 7:07pm

Can you say what state it's in? Seems on a main road in a somewhat small town, is there a need for office? I think your best bet may be self storage or the like. The way you described it, it seems people pass through this town on there way to other places.

  • Analyst 2 in RE - Comm
Jan 10, 2021 - 7:09pm

Can you get it rezoned for multifamily? College nearby or big institution? Lack of quality affordable housing?

  • VP in RE - Comm
Jan 10, 2021 - 7:55pm

Pennsylvania. Also people dont pass through it. Its still a big enough town, but theres a mixed bag of industry. The most well known thing its known for is it sits on a major highway. Theres still a huge hospital system and community college, just five minutes away. Multifamily is tough, it could be done, but problem is with the level of construction costs, we just wouldn't get the rent levels to support it. Realistically, we'd be renting 2BD/2BAs for $1000-$1200 and not more than that.

Jan 10, 2021 - 8:12pm

Saw that you said Pennyslvania. I don't know what highway you're on but if you're not in a large metro area still getting 50k ADT I would maybe do some due diligence on travelers stopping at your exit and if it's a good number of leisure travelers/tourists/families perhaps a miniature golf course/go karts coupled with a drive in restaurant or something like that would make a fun business to operate even if profits aren't what they might be with something else. Tough business so do your due diligence on what kind of people you're getting traffic-wise, but I've always thought those types of rec places could be super fun to own. Add the drive in restaurant and you got your own little tourist pit stop. Would take time and commitment to run though, if your company's doing it probably wouldn't go for this. Just always been in the back of my mind that I'd love to run a place like this someday and your op made me think of it.

Jan 11, 2021 - 10:20am

"I want a #3...and supersize it" 

Commercial Real Estate Developer

  • 1
Jan 11, 2021 - 10:37am

I think a lot depends on if you can get reasonably good signage on the main road/entrance, some restaurants will be okay with it, but signage and access are critical. Another idea (worth looking at demand factors) is free-standing medical clinic (like walk-in/urgent care type). These have been very popular and I don't think will care about frontage as much.

Jan 13, 2021 - 10:25pm

I was thinking a MOB since those are pretty active in the greater Philly area but then saw the 1.25ac so that could be much too small. I like that clinic idea though.

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

Jan 11, 2021 - 3:10pm

If the town has enough people ordering food and a lack of diverse cuisine, a dark kitchen /w cooling/storage may be a good idea. the kitchen can not only provide decent food to the hotel, it also does not require good visibility from the street (unbranded). 2-3 pickup parking spots for Uber Eats and delivery companies. Can be commercially marketed to provide food to other hotels or venues, to the hospital and also the college.

Jan 11, 2021 - 4:19pm

Given the current economic situation, a lot of consolidation will most likely happen in the hospitality and restaurant business. Because of the pandemic people have now learned how to live life with the "delivery mentality".  Hotel operators know that the kitchen is one of the biggest pain points and they really don't want to run a kitchen.

Problem is, a lot of "cloud kitchens" have already popped up in larger cities. Only medium/smaller cities probably won't have them.

It may make sense if there are enough consumers and businesses around to make the orders and who demand better eating options than the local scene permits. Which should be the case in many towns.

Biggest downside is the cost of the kitchen (commercial kitchens are very pricey), build-out costs, and hiring a diverse enough kitchen staff to cover all key cuisines (5-7).


Jan 13, 2021 - 3:49pm

Chick-Fil-A have strict requirements for franchises and wouldn't be a match.


From their franchise documentation:

- You will not be allowed to select your location or to open multiple locations.

- You will not own or receive any equity in your business.

- You cannot have any other active business ventures you're involved in currently.

(plus other requirements)


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