Adaptive Reuse

From Extended Stay to Student Stay

120 Keys

San Antonio, TX

~ Six months from execution of PSA to Closing

Buyer interest included student housing developers, multifamily operators, and adaptive reuse investors

The Brief

The Staybridge Suites at 6919 N. Loop 1604 West had a compelling location story — directly across from the main campus of the University of Texas at San Antonio — but its future as a branded extended-stay hotel was uncertain. Ownership engaged NewGen Advisory to take the property to market and find the buyer who could maximize value. NewGen listed the property at $14,000,000 with an exclusive listing agreement and immediately began working both the traditional hotel investor channel and an emerging buyer profile that the firm had been watching closely: developers looking to convert underutilized hospitality assets into purpose-built student housing. The national student housing shortage had been intensifying for years, and UTSA — one of the fastest-growing universities in Texas — sat in a market where off-campus housing demand consistently outpaced supply. The right buyer wasn’t just buying a hotel. They were buying a fully equipped, permit-ready platform for the exact product the market needed.

The Challenge

The complexity of this transaction operated on two levels simultaneously. First, the deal mechanics: the buyer needed a 180-day rezoning period built into the PSA to pursue San Antonio Zoning Commission approval for converting the property to residential multifamily use — a milestone that had to be achieved before the transaction could move to an unconditional close. Managing seller expectations through a six-month regulatory process, required careful deal architecture and disciplined timeline management from NewGen throughout. Second, the buyer valuation lens was entirely different from a hotel buyer’s. Traditional hotel underwriting looks at RevPAR, NOI, and brand affiliation. A residential developer underwriting a conversion looks at rentable square footage, unit count, cost-per-bed, and lease-up velocity against the student enrollment pipeline. NewGen had to speak both languages fluently — positioning the asset to hotel buyers on hospitality metrics while simultaneously making the conversion thesis legible to developers who didn’t typically buy from hotel brokers. The seller also needed to exit the Staybridge franchise cleanly. The PSA required delivery of title free and clear of the franchise agreement, with all signage and brand obligations terminated prior to closing — adding a brand-relationship management layer to an already complex transaction.

NewGen's Approach

NewGen Advisory approached this engagement with a dual-track strategy from the outset. The property was marketed through traditional hospitality channels at $14,000,000 while NewGen simultaneously identified and targeted adaptive reuse developers who could underwrite the asset as a residential conversion play. The physical characteristics of the Staybridge made the conversion thesis unusually compelling. Because the property had operated as an extended-stay hotel since opening in 2007, every suite already featured a full kitchen, dining area, and a layout functionally equivalent to a studio or one-bedroom apartment. The existing amenity package — exercise room, pool, laundry facilities — required no material capital investment to serve a student resident population. The building’s 85,000-plus square feet offered substantial density on a site where new construction would have faced significant cost and entitlement barriers. NewGen structured the PSA to accommodate the buyer’s rezoning timeline while protecting the seller’s interests — building in a 180-day rezoning contingency with milestone-tied earnest money escalations that kept the buyer committed and the seller appropriately secured. NewGen also managed the franchise termination coordination, ensuring the Staybridge brand obligations were unwound cleanly in advance of the October closing. The transaction closed on October 6, 2021 — fully funded, franchise-free, and rezoning-approved.

The Outcome

Mountain Classic Real Estate, Inc. closed on the Staybridge Suites on October 6, 2021, with San Antonio Zoning Commission approval in hand to convert the 120-room, 85,000-square-foot extended-stay hotel into 1- and 2-bedroom student-oriented apartments directly across from UTSA’s main campus. The conversion required minimal structural modification — the existing suite configuration, full kitchens, and on-site amenities were retained largely as-is, making the project one of the more capital-efficient hotel-to-housing conversions in the market. For ownership, it was a successful exit executed cleanly, on timeline, with a buyer who performed. For Mountain Classic, it was the acquisition of a turnkey residential conversion asset in one of Texas’s fastest-growing university markets. For UTSA students, it would become a well-equipped, proximate housing option in a market that desperately needed more of them. NewGen identified the highest and best use of the asset before it went to market, found the buyer built to execute on that vision, and structured a deal complex enough to require a rezoning milestone without ever losing control of the transaction.

"This property's future wasn't in the next hotel cycle — it was in the 40,000 students across the street who needed somewhere to live. We saw that connection on day one, built the deal around it, and found a buyer who saw exactly what we saw."