Stablegold Insights | October 2026

Wed, 28 Oct 2026 17:03:15 GMT

Dear Readers,

When most investors look at an older two-story motel with doors that open onto an outside walkway, they see a property the market has already written off. The brands are pulling away from it, lenders are wary of it, and the industry reports treat it as the bottom of the ladder. I see something different. For the last fifteen years, I have built my business around exactly these properties, and what I have learned is that for a lot of the people staying in them, that room is not a trip. It is where they live while they get to whatever comes next.

That is the subject of our latest article. The country is short millions of homes that people with little or no income can actually get into. Eviction filings remain heavy, and even the State of Georgia now acknowledges in its own funding notices that many households find shelter in short-term hotel stays. At the same time, the supply of older exterior-corridor rooms is shrinking. Brands are exiting them, governments are converting them, and almost no one is building new ones.

Read the full article below for our take on why this overlooked corner of hospitality is really a housing story, and why owners who run these properties well, with dignity for the people inside them, are filling a need that is not going away.

The market calls it an old motel. For a lot of people, it's home for now.

There is a number from this year's housing research that should change how every hospitality investor looks at the bottom of the market. According to the National Low Income Housing Coalition, the United States is short 7.2 million rental homes that are affordable and available to extremely low-income households. For every 100 of those households, there are just 35 homes they can actually rent. Harvard's Joint Center for Housing Studies counts a record 22.7 million cost-burdened renter households, 12.1 million of them paying more than half their income for housing, and 83 percent of renters earning under $30,000 a year are cost burdened.

Those are housing numbers. But a meaningful share of that gap does not get absorbed by apartments. It gets absorbed by extended-stay motels.

Who is actually staying

The guests at an exterior-corridor extended-stay property are rarely on vacation. They are people between situations. Someone lost a job and the lease ran out before the next paycheck started. A family came out of an eviction. Someone is relocating for work, leaving a marriage, getting back on their feet after recovery, or waiting for a housing voucher or an apartment to open up. An apartment application often asks for exactly what a person in the middle of a crisis does not have: a clean rental history, a deposit, proof of steady income. A room they can pay for by the week, with their own door and their own bathroom, is the bridge.

The supply is shrinking from both ends

At the same time, the stock that serves these guests is getting smaller.

The brands are walking away from it. On its second-quarter earnings call, Wyndham's CEO said the company is "very focused on replacing those lower quality, lower FeePAR rooms with higher quality, higher FeePAR rooms." Skift reported that Wyndham's U.S. economy rooms fell 3 percent to 216,600, with exits up 54 percent year over year. CoStar has reported that more hotels are leaving the economy class each year than entering it, either closing or converting upmarket, and that a quarter of U.S. hotel rooms are now more than 50 years old.

These projects do important work for the people they serve. They also take time, public money, and referrals, and adding kitchens to old motel rooms often means ending up with fewer units than the motel had rooms.

And the new extended-stay product is aimed at a different guest. Choice says nearly half of all economy and midscale extended-stay construction underway in the U.S. is in its system. That is good business, but it is new construction built around project workers and relocations. It does not replace the older room that a person in transition can get into this week.

What distress looks like at this end of the market

Some of those properties are genuinely broken. But many older exterior-corridor hotels are under pressure for reasons that have nothing to do with demand. A brand wants an expensive renovation the property cannot carry. A loan was written for a nightly-traveler business plan. An owner is managing from a distance and the property has slipped.

So when I look at one of these properties, I ask three questions. Is the need there? The housing numbers say yes, and according to NLIHC, no state has enough affordable homes for its lowest-income renters. Is the operation right for the guest who is actually staying? That means a safe, clean, well-managed property where people are treated with respect and can stay long enough to get stable. And can the cash flow carry debt at today's terms, not the terms the last owner signed?

If the answers are yes, yes, and fixable, you are looking at a business problem wearing a distress label, sitting on top of demand the market is not counting.

Where this leaves us

I started this company in 2011 with a single turnaround, and over fifteen years I have learned that the older motel the market has given up on is often doing a job no one else in the housing system is doing. The rooms are disappearing faster than they are being replaced, and the need for them is growing.

The investors who come out of the next few years well will be the ones who see these properties for what they are, and who are willing to run them with the care their guests deserve. The ones who only see an old motel will keep missing one of the most durable sources of demand in real estate.

Let's Connect

If you'd like to hear more about what we're seeing in the market and how you can be a part of it, send us an email. We'd welcome the conversation.

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Stablegold Insights | October 2026