Value Place, which has created a new brand in the hotel market, is scouting for 12 sites in Hampton Roads, from 1.4 to 1.6 acres in size, preferably on a street with high visibility and 30,000 vehicles a day, for its residential lodging product.
The brand is a hybrid of an apartment and a hotel, and Value Place, based in Wichita, Kan., and founded by hotel entrepreneur, Jack DeBoer, is billing this new product as low-cost, safe and secure short-term residential lodging.
DeBoer, the founder of Residence Inn, Summerfield Suites and Candlewood Suites, is franchising this brand to several companies, including New River Holdings of Kansas City, Mo., which has bought the franchise for the 12 hotels proposed for Hampton Roads and for six in Richmond.
“Jack DeBoer and his brands are proven winners,” said Dave Martin, president of New River Holdings. “We’ve received tremendous support from the franchise team. That will be the key to our success since we’re new to the hotel industry.”
Each hotel is roughly 50,000 square feet with 121 units, broken down into three room options: studio, studio sleeper and studio double. Each unit is equipped with a stove, refrigerator and a microwave oven.
Martin said the Value Place hotels are like entry level extended stay lodgings with no frills, appealing to government workers, military personnel and construction workers on temporary assignment in the area.
“In Norfolk, there are a lot of people contracted with the military or the government,” Martin said.
Weekly rates are standard, Martin said. But “we haven’t determined what those rates are at this point.” Each franchisee determines the rates based on what the market can bear.
Martin said this is his first experience with the hotel industry; this is his third business venture. His partner, Glenn McFarland, was born and raised in Virginia Beach, so he is familiar with the layout of the region.
“I feel very comfortable with the support we have gotten from Value Place corporate,” he said.
New River will also own and manage the first Value Place in Kansas City, Mo., the first of seven planned for the area. Now under construction, it is expected to open soon.
The real estate division of Value Place Franchise LLC is scouting for sites in Hampton Roads for New River Holdings.
“They have been working to secure real estate,” said Gina-Lynne Scharoun, president of the Value Place affiliate. “We haven’t closed on any yet.”
The 105- and 121-unit properties can be developed for about $30,000 per unit and operate with the equivalent of four to five full-time employees, according to Value Place.
“Visibility is key,” Scharoun said about the location of the hotels. “Accessibility isn’t as important as long as the client knows where it is.”
“Price is key,” she said. “We have to have a low price on the land.”
Scharoun said Value Place might buy an out-parcel that no one else can use.
“We will pick a lot of sites that aren’t zoned properly,” Scharoun said. “We aren’t afraid of buying sites that aren’t zoned properly.”
The hotels are equipped with electronic locks and surveillance cameras, Scharoun said, pointing out the security features.
Value Place is able to offer low prices “partly through construction details and partly through land price,” Scharoun said.
“The prototype is stick, not a cheap stick,” Scharoun said, meaning the hotels are wood construction, though the type of materials used depends on the location. For example, block and plank materials are used in hurricane prone areas like Florida.
Value Place has used steel in the past “when it was priced the same as stick,” she said.