Arctaris Impact Investors, LLC,
a national impact investment firm with a 15-year track record in underserved communities, announced late last month an equity investment in a $27 million opportunity zone hotel-to-residential conversion opportunity in downtown Silver Spring, Maryland.
Source of the Spring
reports that it will be the former Hotel Silver Spring, located at 8727 Colesville Rd., that closed in May.
According to a press release by Arctaris Impact Investors, Impact’s investment will be used to convert a former hotel into a vibrant 227-unit multifamily development, addressing the city’s pressing housing shortage. The transaction marks Arctaris Impact’s sixth active investment in the greater Baltimore-DC metropolitan area.
Arctaris Impact’s latest investment will contribute to the revitalization of the Silver Spring community, a suburb approximately seven miles north of Downtown Washington D.C., by addressing the region’s housing affordability crisis. Affordable housing remains a challenge in Montgomery County and this project intends to provide more options for local residents in a high opportunity submarket within the metro area. By utilizing Montgomery County’s PILOT program, half of the Property’s units will remain affordable to households earning up to in 60% of the Area Median Income (AMI).
The development is led by GoodHomes, a New York City-based firm that specializes in distressed hotels to affordable housing conversion projects. Housing on Merit, a national non-profit, committed to preserving and developing affordable housing, will serve as the Project’s non-profit Managing Member. This project marks Arctaris Impact’s second collaboration with GoodHomes, following a prior hotel-to-residential conversion project the two firms partnered on last year in
Downtown Baltimore
.
“We are proud to provide Montgomery County with new affordable housing solutions in an area that also offers residents additional social benefits including healthy food options and public transit,” said Arctaris Managing Director Anita Graham. “Affordable housing is a necessity for communities like Silver Spring because it not only boosts the local economy, it also promotes financial stability and improves the well-being of its residents. Arctaris Impact continues to look for new opportunities like Silver Spring that address affordable housing shortages and allow communities to reap the benefits of living in more desirable neighborhoods.”
“Partners like GoodHomes and other stakeholders including Montgomery County make impactful deals like this one a reality at a time when our country continues to grapple with a growing, nationwide housing crisis,” said Andrew Gibbs, Principal of Real Estate at Arctaris. “It is through strategic partnerships like these, bringing together public, private, and non-profit partners, that we can fund projects with the potential to catalyze real change in the communities that need it most. We are excited to expand our footprint across the Baltimore-DC metro area and will continue to identify new solutions to upgrade the livelihood of its residents.”
This investment was made in partnership and partially through a multimillion-dollar commitment from Erie Insurance (ERIE). Based in Erie, Pa., Erie Insurance invested in the GoodHomes project as part of a $20.5 million social impact commitment to fund companies and development projects in underserved communities within the company’s footprint.
“Erie Insurance is pleased to partner with Arctaris and further its commitment to Maryland by investing in this large-scale hospitality-to-residential conversion project in Silver Spring,” said Christy Blashock, vice president and corporate sustainability & community development officer at Erie Insurance. “When our team considers social impact investment opportunities, we specifically look for projects and partners that align closely with our values. GoodHomes has a proven track record of transforming fatigued properties into flourishing apartment complexes that provide dynamic communities.”
ERIE and Arctaris have also partnered together to invest in social impact projects in Lima, Ohio, Pittsburgh and Washington, D.C. This venture highlights Arctaris Impact’s interdisciplinary approach to impact investing, combining financial returns with positive social outcomes.
