San Jose Hotel Eyes Apartment Conversion Amid Market Blues
A significant shift is underway in North San Jose as the Sonesta ES Suites at 1602 Crane Ct. is being considered for conversion into residential apartments or condominiums. This preliminary proposal at City Hall highlights the ongoing challenges faced by the Bay Area’s hotel sector and could offer a new solution to the region’s housing demands.
Bay Area Hotel Market: A Wobbly Landscape
The lodging industry across the Bay Area has been experiencing a downturn, marked by loan defaults, foreclosures, and a decline in property values. This difficult economic climate is prompting hotel owners and developers to explore alternative uses for their properties, with residential conversions emerging as a viable strategy.
Details of the Sonesta ES Suites Proposal
The Sonesta ES Suites, a 114-room hotel comprised of seven buildings in North San Jose, is at the heart of this new residential vision. Project plans detail an interest in remodeling the existing hotel suites into multi-family rental apartments or for-sale condominiums. Situated near key tech company offices off Zanker Road and Bering Drive, the location could prove appealing to future residents.
The proposal is spearheaded by Jay Shah, vice president of development with Kalthia Group Hotels, with the property currently owned by an affiliate of Hospitality Properties Trust.
Why a Suite Hotel Makes Sense for Conversion
According to Alan Reay, president of Atlas Hospitality Group, a firm specializing in the California lodging market, converting a suite hotel into apartments is a logical move. “Suite hotels have a living room, a separate bedroom, and a kitchen,” Reay noted, indicating that these units already possess many features found in typical apartments, making the transition more straightforward and cost-effective.
| Feature | Suite Hotel Unit Characteristics | Apartment Unit Characteristics |
|---|---|---|
| Layout | Living room, separate bedroom | Living room, separate bedroom |
| Kitchen Facilities | Yes | Yes |
| Suitability for Direct Residential Use | High, due to existing features | N/A (already residential) |
Potential for Affordable Housing and Resident Amenities
An exciting aspect of this proposal includes the potential for an affordable housing component. The application states that “The applicant would be willing to provide 100% of the units for affordable housing if entitlement concessions are available by means of city policies.” This could significantly contribute to San Jose’s need for more affordable housing.
Future residents would also benefit from existing on-site amenities, including a pool, weight room, and meeting rooms, which would be integrated into the new residential community.
A Growing Trend in San Jose Real Estate
The conversion of hotels to residential or care facilities is not new to San Jose. Other notable projects include:
- The 264-room southern tower of the Signia by Hilton hotel at 184 South Market St. in downtown San Jose, which was successfully converted into San Jose State University student housing and opened in August 2024.
- A plan to transform an Aloft hotel at 4241 Moorpark Ave. into an 80-unit residential care facility, featuring assisted living and memory care.
These examples illustrate a broader trend of repurposing hotel properties to address diverse community needs, from student accommodation to senior care and now, potentially, general housing.
Frequently Asked Questions About Hotel Conversions
- Which San Jose hotel is being considered for conversion?
The Sonesta ES Suites at 1602 Crane Ct. in North San Jose. - Why are hotel conversions becoming more common in the Bay Area?
The Bay Area hotel market is struggling with loan defaults, foreclosures, and reduced property values, making residential conversions a more economically viable option. - What makes a suite hotel suitable for apartment conversion?
Suite hotels already feature separate living rooms, bedrooms, and kitchens, making their layouts easily adaptable for apartment living. - Will the proposed Sonesta conversion include affordable housing?
Yes, the applicant has expressed willingness to offer 100% affordable housing if specific entitlement concessions are granted by the city. - Have there been other hotel-to-residential conversions in San Jose recently?
Yes, the Signia by Hilton was converted to SJSU student housing, and there’s a proposal to convert an Aloft hotel into a residential care facility.
This potential conversion of the Sonesta ES Suites reflects San Jose’s adaptive approach to its evolving economy and housing landscape. For Bay Area locals, it signals a strategic move to address housing shortages by leveraging existing infrastructure in innovative ways, turning market challenges into community opportunities.
San Jose Hotel Eyes Apartment Conversion
