A shuttered 142-room American Lodge Motel on South Hosmer Street has been acquired by Kirkland, WA-based Sage Investment Group for $11.5 million. The company plans on converting the South Tacoma hotel into much-needed affordable apartment units.

According to the Puget Sound Business Journal, this is one of several former hotels/motels that Sage Investment Group has purchased in order transform them into affordable residential units. Crux Commercial Partners’ Jacob Wilson arranged the financing for Sage, saying the firm, which owns over 1,000 housing units across the country, has a history of success.

Sage is a for-profit company, but the deep need for affordable housing is fueling value-add investment in the asset class. The firm’s co-owner Emily Hubbard told the Business Journal that turning hotels into housing in much easier than developing affordable housing from scratch.

The property’s South Tacoma location is just off Interstate 5 at S. 84th Street and a short 7 mile drive to the city’s Central Business District.