Bluevale Capital Accelerates Adaptive Reuse Strategy with 96-Unit Conversion of Former CT Hotel

It's the latest case of a mid-tier Connecticut hotel going away.A Marriott Residence Inn in the lower Naugatuck Valley is being remodeled into The Shelton Grove, an upscale 96-unit apartment complex. The hotel shut down in September, and sold for about $9.3 million in early October to asubsidiary of the Bluevale Capital real estate investment firm, according to town records.Converting the 37-year-old hotel in Shelton into studio and two-bedroom apartments made sense because of the current market, said Jefferson Huang, managing director. "Connecticut is in a housing crisis," Huang said. "But the cost of building new has gone up substantially. With construction materials and labor, it's really difficult to pencil in building from the ground up. This building has good bones. Bluevale isn't alone in repurposing a Connecticut hotel. Developers since the pandemic have been scooping up a number of faltering ones, either for conversion to apartments or to takedown for other uses. The Hartford Marriott in Farmington was renovated into the Up House apartment complex two years ago, the former 240-room Danbury Crowne Plaza is being remodeled into studio and one-bedroom apartments, and the derelict Red Lion in Cromwell - a once-thriving Crowne Plaza - is boarded up and awaiting demolition to clear space for an all-new apartment complex. The eight-story DoubleTree in Norwalk was demolished last year to make way for the adjacent Costco to expand its parking, Hartford's Homewood Suites closed in 2020 for conversion to apartments, and Bridgeport's Holiday Inn was shut down in 2022 and later transformed into apartments. In Shelton, Bluevale promotes its new Shelton Grove complex as a small village because of the former hotel's uncommon design: The Residence Inn was built as a series of 13 small buildings on a wooded property. Amenities include an outdoor pool, a fitness center, clubhouse, a private courtyard without door barbecue grill, and on-site laundry services. Contractors remodeled some units already in the first weeks after the sale went through, and are still painting or replacing fixtures and flooring in others. Tenants have begun moving in; Bluevale reports occupancy is already at 20%, and expects to have the rest of the complex leased out shortly. Rents are $1,800 for 500-square-foot studios, $2,250 for 670-square-foot two-bedroom models, and $2,650 for 800-square-foot two-bedroom penthouses. Bluevale set aside 19 apartments as affordable; they are reserved for tenants who make no more than 80% of the region's average medium income, meaning a cap of roughly $60,000.

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