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No Reservations: Transforming Hotels into Housing

Creating student housing from a hotel requires a clear vision. Here's how to make it happen.
University Business, Jun 2010
In 2009, officials at The Ohio State University purchased a former Holiday Inn and its adjacent parking garage to meet a housing need for that year?s fall move-in. The area containing a pool (top) was converted into a multi-purpose room (bottom).

When there's an opportunity to convert a hotel into student housing, should officials pursue it?

A hotel building can be turned into a housing solution due to having similar amenities - including bedrooms, dining rooms, and bathrooms - found in traditional residence halls. It can provide an immediate solution when an institution is in dire need of quick housing due to a sudden spurt in enrollment before the school year starts.

David Adelman, CEO of Campus Apartments, a firm that develops and manages student housing, sees this problem first hand, as officials have to make decisions such as determining which classes to allocate campus housing to and changing room setups to accommodate more residents.

"It is just more people coming than they anticipated," says Adelman. When the credit crunch hit, administrators had to shelve plans for housing renovations and work with facilities that might not be operable in time. Adelman notes that institutions could find themselves "losing housing stock."

Others involved in facilities seem to agree on this common ground. Michael Schultz, director of university housing at Southern Illinois University, Edwardsville, finds there are two main reasons for such a conversation: a shortage of housing, or to keep the area around campus vibrant. Jim Curtin, principal at the architectural firm Solomon Cordwell Buenz in Chicago, says it's not unreasonable for schools to consider reusing a hotel for housing to compliment their inventory of existing student units. His firm completed a residence hall for Loyola University Chicago based on a hotel room format so the units could have some flexibility in being adopted for changes in use over time (such as changing from serving freshmen residents to sophomores) or for occupancy during the summer months.

'It was really an opportunity for us to expand what we do by becoming a destination university.' -Wayne Beran, University of Houston-Victoria

There are many factors that administrators need to examine in considering such a project. Here are insights from facility experts and four higher ed institutions that have or are currently undergoing this experience.

If a former hotel's age and physical condition are right, the transformation could happen quickly. "The general layout of a hotel room is in many ways much like a dorm room," points out Wes Good, managing principal at Kirksey Architecture in Houston. Officials mainly need to ensure the structure meets current building codes.

Schultz, also president of the Association of College and University Housing Officers - International, explains that fully enclosed hotels with bathrooms in good condition and enough floor space are best for this kind of project.

Curtin, a founding member of ACUHO-I's 21st Century Project, which assists institutions in designing residential spaces for the ever-changing roles they play in the collegiate experience, finds a hotel-to-student-housing configuration can mean facing the challenge of establishing a sense of community for students living there. "Hotel type rooms and floors typically do not have social space for students," he explains. But he points out that amenity spaces found in hotels, such as lobbies and entry lounges, central laundry stations, and fitness centers, could make good student gathering areas, "You can start to compose a variety of amenities within the building to help foster community in that building," he adds.

Not surprisingly, an older hotel may not be in great shape and may require many physical updates before it's used as student housing. Common issues can include asbestos and antiquated mechanical systems that heavily consume energy. Replacement of fire sprinkler systems and adding handicap accessibility can add further to renovation costs.

Administrators at the University of Houston-Victoria dealt with those kinds of issues in remodeling a 50-year-old hotel purchased in December 2009. Included in a 10-year business plan and using state funds and revenue bonds, the building's price tag came to about $2.8 million.

The purchase of the former two-building Inn Place Hotel was to aid UHV in welcoming its first freshmen and sophomore classes this fall.

Established in the early seventies as an upper-level public institution, the Texas university had been providing junior, senior and graduate-level classes for students who were commuters or took their courses online. With the state legislature giving UHV approval to add freshmen and sophomores this fall, its officials agreed student housing would be needed for their new roster, explains Wayne Beran, vice president for administration and finance.

To be named Jaguar Hall for athletic teams, the new building is located about half a mile from campus. Its renovation process includes a new roof, kitchen facility, and floor and drainage system. One issue came up during a stage in the remodeling process last October, when a consultant found asbestos in both buildings, but at the time its severity was vastly understated. UHV officials have decided to tear down Building B, the west building on the site that had the worst asbestos issue. Renovation would have cost an estimated $5.5 million, while tearing the building down is expected to be about $500,000. Discussion on what will happen with the land is being studied.

But officials feel as if the decision to purchase and convert the hotel was a good one. "We knew we had to get something [ready] because once we got the approval to allow freshmen to come to this campus, we wanted to move quickly," Beran says.

Working with Don Krueger Construction, based in Victoria, and Houston-based architectural consultants PageSoutherlandPage, renovation on Building A has been scheduled to continue as planned for the fall opening of Jaguar Hall. Building A will have 140 rooms with private baths and can house 256 students. Most of the rooms will have double occupancy.

Like with any real estate purchase, finding the right hotel to convert is all about location. The closer a hotel is to a campus, the more it is a good fit. "Any hotel that is adjacent to a college campus I think would be a reasonable opportunity for a university," points out Good.

Curtin believes students are attracted to residing in such a building. However, he advises that any hotel-to-housing project needs to work within the overall mission of the type of housing on campus. "Students, primarily freshmen and sophomores, need to have a location that's close to the heart of campus and that has built-in peer support," he says. "As [a student] moves closer to junior or senior year, and certainly graduate housing, facilities that are properties adjourning to or slightly off campus could be a possibility."

In spring 2009, officials at The Ohio State University purchased a former Holiday Inn and its adjacent parking garage for $20 million to fulfill a housing need in time for that year's fall move-in. There had been an increase in demand for additional student housing and officials wanted to meet initiatives such as a policy of having sophomores reside on campus, explains Toni Greenslade-Smith, director of housing administration. "The timing worked out very well that the inn became available as we're moving in this direction."

What made buying the defunct Holiday Inn a smart business decision was the facility's good shape. "It was certainly less expensive for us to buy a pre-existing facility that didn't need a lot of work than it would have been to build new," says Greenslade-Smith.

A ballroom stationed next to a banquet kitchen is being used for dining, and laundry facilities were added. A pool was converted into a recreational room. Upgrades were done to elevators, and an office desk at the front near the entrance was tailored to resemble the ones at other residence halls. Wireless ResNet was installed throughout the building.

Prior to the purchase, a number of planning meetings were conducted so administrators could clearly define the scope of work the building would require. Officials from facilities management to residential life to the CFO's office discussed everything from fire safety codes to cosmetic changes. The building was upgraded with sprinklers and a new fire alarm system was installed. Four elevators were modernized and a hazardous material abatement conducted.

"We tried to identify anything we [thought] might be needed in the scope of work as we rolled into it," remembers Greenslade-Smith.

Lane Avenue Residence Hall, set up with traditional two-person rooms with private baths, houses approximately 447 students, plus 11 staff. Greenslade-Smith has heard students request a pedestrian bridge so they can safely cross the busy street between the residence hall and the campus. Requests aside, the project overall has been successful. Roughly 75 percent of OSU students have decided to return to live in the building next year. "I think they like the idea it has a different feel for a residence hall than a typical dormitory," finds Greenslade-Smith.

In terms of town-gown relations, Schultz of Southern Illinois says that city officials may encourage converting a hotel to student housing. "It keeps the property vibrant and doesn't become an eyesore."

Throughout 2002, Gettysburg College (Pa.) officials acquired three motels stationed on the historic town's main street near the liberal arts institution campus for student housing. They all had the same owner, who transferred ownership to the institution, for $6,700,000. Officials quickly put the roughly 30- to 40-year-old buildings into service. A fourth hotel had been acquired several years earlier from a different owner, so Gettysburg leaders weren't unfamiliar with the conversion experience.

Gettysburg "has been blessed with a steady growth in numbers and in student quality; along with it came the need for student housing," says Dan Konstalid, vice president for finance and administration. "[It was] the combination of being able to address our housing needs, and also acquire properties that were in strategic locations that we would want to control because they are on the border of our campus."

The properties were already of a size and scale that "fit nicely in the neighborhood," remembers Konstalid. "What we did is try to change their appearance and address their maintenance needs." Some renovation work was undertaken over subsequent summers when the units were not occupied. Necessities included paint, landscaping, lighting, new carpet or flooring, roof repairs or replacement, and electrical and HVAC work. In addition, the College has been adding sprinklers and addressable fire alarms to all college-owned residence halls over the past several summers. The former motels were part of this phased initiative.

Currently, these properties house approximately 200 students. The renovations were self-managed by the college and a host of subcontractors completed the work.

In fitting a new former hotel in with residential life policies, Schultz advises considering carefully security issues such as patrolling the walking distance to and from campus as well as the building overall and even determining how the new facility will fit with residence life housing policies.

The motels remain on the local tax roles, which has helped the college with town-gown relations, says Konstalid. It was a voluntary decision that meant the municipalities would not sustain revenue loss as a result of the acquisitions. The pros of the projects, for the college, have included fulfilling an immediate need without delaying to build and the ability to manage properties located on the college's borders. "Acquiring these properties has been [more] cost effective than constructing our own in this particular moment," says Konstalid. For other institutions considering a hotel purchase, Konstalid suggests looking for more than a single end result. Pointing to his college, he finds that having properties on campus borders and having them managed in a manner that has benefits is a win not just for the institution but also surrounding communities' interests. "I think you need multiple wins to really maximize your benefit."

The Rochester Institute of Technology (N.Y.) has a similar conversion tale but has kept part of a building as a hotel and banquet hall while at the same time adding student housing.

In the summer of 2001, RIT was bequeathed a Marriott hotel from the Del Monte family; Ernest Del Monte is an honorary RIT trustee, and his son John serves on the board for the institute's food, hotel, and travel management program. The gift was an unexpected surprise. Howard Ward, assistant vice president for student auxiliary services, recalls he and his colleagues trying to determine how the building could best serve RIT right before that fall's semester started.

But they were able to use the building, now the RIT Inn and Conference Center, in part as housing based on its physical layout, which allowed guests and students to be separated. It is about evenly split between the number of guest rooms and students. Students are based in the building's Court and West Towers, with the remainder being public rooms.

No major renovations were needed, as the hotel was still functioning as a hotel when the institution took ownership. Minor upgrades were conducted to rooms and lounges to give them more of a residence hall feel. The Inn and Conference Center accommodates just over 330 upperclassmen. Each double-occupancy room with a private bath is equipped with a desk, a closet, a nightstand, and a six-drawer dresser as well as personal amenities such as an ironing board, an alarm clock and a hair dryer. At the start of the fall semester, some transfer and graduate students and upperclassmen that have not been assigned permanent housing are placed in temporary housing in the hotel area of the inn.

Located four miles from RIT, the hotel's amenities, such as the fitness center and a shuttle service, are promoted to students, Ward says. Dining services include a restaurant offering bistro-style dining, with grab-and-go sections and a coffee station also available.

"We are still trying to figure out how to make it a great sell to our students, because it appears [that] it's going to be with us," he notes.

But the public part of the facility, called the RIT Inn & Conference Center, has been well received by guests with accommodations that include indoor and outdoor pools, a sauna, whirlpool, fitness center and business center, and two restaurants. Weddings, conferences, and other social events are held at the inn, with revenue from these events going to operations, which helps hold down charges for students.

The facility has been received well by guests. "Initially folks would view it as RIT student housing and wouldn't come up, but we tried to reassure them that we would still put on a quality program for them," says Ward. "That's no longer a factor in terms of people considering the inn."

Students, however, aren't left out. The RIT Inn also acts as a working lab for the institution's academic programs, including applied engineering and human resource management, and provides co-op opportunities for students.

Good, whose firm bid on a hotel conversion project recently, thinks most often higher ed institutions that acquire such a property are doing so with the intention of keeping it for the long haul. Still, he advises considering the sell-ability of any acquisition.

UHV's Beran cautions fellow administrators considering such a purchase to fully do their research about a particular hotel property before stepping into this venture. UHV officials conducted two different studies prior to making their purchase. Another concern that Beran and his colleagues encountered during consideration for purchasing the hotel was that the building was still in operation. The owner didn't want the employees to be alerted that the hotel may be for sale. "It was a very touchy situation," he recalls.

Beran points out that it can be easy to be enthusiastic about such a real estate find, but still keep it in check. "You may be able to find a great opportunity there, but sometimes it may be that the hotel doesn't fit what you are trying to do and you are better off just to build new."

With OSU, Greenslade-Smith says, "It helped in the planning phase to have everybody at the table who is going to in some way, shape, or form touch the project." It's been done with past projects, she adds, but the process also looked at what timelines should be defined for specific tasks. "This time everybody focused on defining not only what needed to happen but sequencing it."

As with any facility, remember to factor in budget planning for long-term maintenance, to prepare for the chance of having to repair roofing or mechanical issues, says Good. "The operating budget should include maintaining and upgrading those systems over time. It comes into play down the road."

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