The real estate market is a constantly evolving landscape of supply and demand. Adaptive reuse is the key to meeting that changing demand by transforming buildings that were in demand years and decades before. Shops become restaurants, office buildings become health clubs, and historic buildings become exclusive loft apartments. However, one of the most perfectly aligned adaptive reuse transformation is hotels to student housing.
Amenities are all there, and university communities are in acute need of dense, affordable housing for growing student populations. Today, we’re taking a deep dive into the trend of adaptive reuse, building old hotels into state-of-the-art student apartments and dormitories.
The Rise of Adaptive Reuse in Real Estate Development
More than a real estate buzzword, adaptive reuse is a sustainable and economically efficient way to repurpose existing structures to meet current market needs. Adaptive reuse examines a building’s location, amenities, infrastructure, and floorplan to determine how its features can best meet the needs of evolving real estate development demand.
It is a way to reclaim great locations and to save on new-construction real estate development by rebuilding existing structures, instead. The opportunity to save money by using existing features, make use of high-demand property locations, and meet sustainability goals all explain why adaptive reuse is becoming so popular in real estate development. Not to mention that repurposed structures add historical charm to the new building.
The Acute Demand for Student Housing
Universities and colleges never have enough on-campus dormitory housing for their full enrolled student body. This assumes that some local students will commute from home, but that most students will secure affordable apartments nearby. Considering the combined factors of housing shortage and skyrocketing rent prices, the margin for affordable near-campus apartments has disappeared. Even when students can find apartments near campus, they are often well above the price point that a student – or even a group of roommates – can reasonably afford.
So, there is a lot of demand for student housing, and there is a woefully short inventory that meets the location and price-range needs of student populations across the country.
Hotels Are Perfect for Student Housing Rebuilds
So, why are hotels in the spotlight for student housing adaptive reuse projects? It makes perfect sense when you consider the inherent design of any hotel built in the last hundred years. Hotels consist of dozens to hundreds of private bedroom suites, each with a sturdy locking door and their own ensuite bathroom.
On top of that, hotels also include shared spaces and amenities like interior restaurants, gyms, and lounges. They have robust infrastructure for providing AC and hot water to every guest room and shared spaces. Modern features designed for traveling business professionals, like desks, advanced outlets, and televisions, only make the fit more ideal.
If the hotel structure has been in operation recently, then the building and safety features are also likely already up to code, or easy to update to meet residential standards. In other words, hotel building design is already near-ideal for student housing, requiring only slight adaptations to meet local codes or transform shared spaces to better suit student dormitory lifestyles.
The Benefits of Adaptive Reuse for Student Housing (Instead of New Construction)
There are three powerful key benefits to adaptive reuse for real estate developers when looking to introduce new student housing to a local community.
Cost Reduction
First and foremost, a well-appointed hotel property will cost much less to refit into student dorms or apartments compared to building the entire structure from the ground up. Even with major renovations, the floors, housing units, and essential features are already in place. Hotel properties in regions where travel demand has shifted can also be quite affordable to purchase before the refit.
Location Access
When it comes to student housing, location is critical. Universities and colleges are often found in dense and highly developed neighborhoods. All the properties close enough to walk or bike to campus are typically occupied. At the same time, hotels are often placed in key high-traffic locations. Adaptive reuse of a hotel property can provide students with housing in a critical near-campus location.
Sustainability
Lastly, adaptive reuse offers significant sustainability advantages compared to new construction. New construction adds up to a massive carbon footprint, from breaking ground to sourcing materials for an entirely new structure. Adaptive reuse allows you to minimize the new materials needed and the overall ecological impact of construction – ensuring both conservation and eco-friendly project planning.
Typical Challenges When Converting Hotels to Student Housing
Some hotel structures are uniquely suited to become student housing, but challenges can arise in repurposing a property. Key challenges for converting hotels into student housing can include:
- Meeting building codes for housing vs hotel design
- Rebuilding hotel guest amenities into student lifestyle amenities
- Retrofitting building-wide systems
- Updating hotel properties that have not been kept modern or have been vacant for some time.
- Updating old infrastructure, like HVAC and water heaters that are near end-of-life
How Adaptive Reuse Aligns with Student Housing Trends
Adaptive reuse is an optimal way to meet the growing demand for student housing, while also aligning with the values of modern students. Most college students today are Gen Z, representing a strong preference for eco-friendly and extremely modern design. They are passionate about creative and sustainable solutions and embrace the idea of urban renewal to meet modern needs.
It not only reclaims valuable near-campus properties and takes advantage of the similar architectural style of hotel design, it also results in student housing properties that are appealing to modern students. Each project adds a dash of history, sustainable design, and interesting modernization to the basic need for affordable near-campus housing, ensuring your repurposed properties will draw the population needed to see satisfactory ROI.
Hotel-to-Student Housing Case Study: Sleep Inn & ASU
NewGen Advisory recently completed an adaptive reuse project, transforming a Sleep Inn across the street from Arizona State University (ASU) into beautifully modern student housing. Senior Vice President, Ryan Bodine, shared in a recent interview that the property “was already home to similar student housing projects [and] created an opportunity for development.” He later went on to say that for the “15 fastest-growing universities, finding the right property close to campus or near existing student housing makes conversion projects especially viable. It just makes sense to repurpose hotels in these areas to meet the housing demand.”
When asked about challenges in the conversion, Bodine explained that “one of the biggest challenges is navigating the rezoning process, which is often required for these types of adaptive reuse projects.” The property “went through a two-year rezoning process to ensure approval for the number of units the developers intended to build. Despite the lengthy process, the property’s strategic location and the competitive price per acre made it an excellent choice for conversion.”
Unlock the Potential of Adaptive Reuse for Student Housing and Beyond
In real estate development, adaptive reuse is on the rise for its profitability, sustainability, and the powerful impact of urban renewal to meet evolving demand. Learn more about adaptive reuse opportunities with NewGen Advisory.