stayAPT Suites Turns to Modular Construction
Apartment-style brand stayAPT Suites, which has grown to 40 open hotels with another 50 in the pipeline, has signed a franchise agreement with Capstone Stay LLC to develop five modularly constructed hotels in the Midwest.
“We’ve always felt like our product lends itself to doing modular construction based on how we design and build these hotels,” said Gary DeLapp, president/CEO, stayAPT Suites. “And so Capstone came in and really liked our product because of the design and residential feel of our properties. They own their own modular warehouse and have assembled their own in-house team, so it enables them to make changes and adjustments internally, rather than going to a third-party company. Plus, Capstone has a vested interest and wants to be part of the brand.”
DeLapp had just returned from a visit to the Capstone warehouse in Granite City, IL, where he surveyed the work being done on the stayAPT guest suites.
“My team and I looked at what they had put together for the modular model sample, and I was completely blown away by the quality of construction of the first one that was done,” he said.
The CEO explained what makes building hotels with Capstone different from traditional construction, specifically the controlled environment and the timeline.
“In a controlled environment, you don’t have all the challenges and issues with contractors and subcontractors, and you don’t have to deal with the weather,” he said. “The timeline is also quicker. Instead of taking 17 to 18 months in some cases, due to all of the challenges out there, Capstone can get it done in about 10 months.”
The franchise agreement calls for stayAPT Suites properties in Evansville, IN, which is expected to break ground in late summer/early fall; Gardner, KS; Rossford, OH; and Wentzville and Liberty, MO. DeLapp touched on why these specific markets were chosen for the agreement.
“Post-COVID, we went out and land banked a bunch of locations after doing research on those markets ourselves, so we were able to feed these into potential franchisees,” he said. “So it’s a combination of sites that we have already reviewed to understand the demand generators, as well as sites in the St. Louis area, which the Capstone people identified as markets they know from their past experiences.”
These properties will join the growing stayAPT Suites portfolio, which has opened about 20 hotels over the past 14 months. This year alone, the company opened three properties in Tennessee; its third hotel in Charlotte, not far from its headquarters in Matthews, NC; and its first hotel in Louisiana; among others.
The company also recently signed a franchise agreement with Destiny Partners LLC to develop five new properties in key markets across Pennsylvania, including Lancaster, Reading, York, Bethlehem and Allentown.
All of that growth doesn’t mean that the company and its hotels aren’t dealing with industry challenges such as the lack of financing, high operation costs and the labor shortage.
“It’s gotten really challenging out there, and we’ve tried to support franchisees with connections with financing, and we’ve had some financing programs that we’ve shared with some of the franchisees who are qualified,” said DeLapp. “On the operating side, we are fortunate to have our lean labor model, which is like a multifamily building, where the GM lives on site and we have a small staff. We have the best of both worlds: we’re in the lodging space, and we’re taking a page from the multifamily business in our operating model.”
The CEO doesn’t see the brand slowing down, with plenty of new opportunities for franchises and new markets to tap throughout the country.
“We will obviously continue to keep growing because there’s so much white space,” he said. “You look at some of the other brands and the number of assets they have, we are a long way from being anything close to capacity. Of course, any market we’re interested in must have the right demand generators. We have upcoming locations that we’re excited about because those markets are very strong and have been proven winners.”