SAN JOSE — A hotel complex in San Jose could be reborn as a residential hub under a proposal being floated at City Hall in a fresh sign that the region’s lodging sector remains under siege in a tricky economy.
The Sonesta ES Suites hotel at 1602 Crane Ct. in North San Jose could be converted to apartments or condominiums under a very preliminary proposal on file with the city’s Planning Department.
The 114-room hotel consists of a cluster of seven buildings, according to the project proposal.
“The applicant is interested in investigating the possibility of remodeling the hotel suites into multi-family rental apartments or for-sale condominiums,” the project plans state.
The conversion proposal has emerged at a time when the Bay Area hotel market faces loan defaults, foreclosures and plunging property values as the sector battles to steady itself in a post-coronavirus era.
“It makes a lot of sense to convert a suites hotel like this to apartments,” said Alan Reay, president of Atlas Hospitality Group, an Irvine-based firm that tracks the California lodging market.
Why? Units in this sort of lodging already contain multiple features that could readily apply to an apartment, according to Reay.
“Suite hotels have a living room, a separate bedroom, and a kitchen,” Reay said.
The hotel is located in a section of North San Jose that’s dotted with the operations and offices of an array of tech titans. The lodging hub is near the corner of Zanker Road and Bering Drive.
An affiliate of Hospitality Properties Trust owns the hotel. The conversion proposal is being led by Jay Shah, vice president of development with Kalthia Group Hotels.
Future apartment residents, were the conversion to proceed, would have access to an array of amenities that already exist on the hotel property, the planning documents state.
“The existing pool, weight room, and meeting rooms would add amenities for the future residents,” the application states.
The applicant might pursue a general plan amendment that would designate the property as a residential or mixed-use site, according to the proposal.
An affordable housing component might also be in the works, depending on the evolution of the proposal.
“The applicant would be willing to provide 100% of the units for affordable housing if entitlement concessions are available by means of city policies,” the application states.