From Check-Ins to Move-Ins: Exploring Hotel-to-Student Housing Conversions

BDB Construction CEO Tallal Bhutta on what’s driving this trend and how to navigate through its challenges.

Hotel-to-student housing conversions have been supporting the increasing demand for student housing units in high-cost markets such as New York City or San Francisco. A growing number of underutilized properties are getting a new life as vibrant communities, but the conversion process comes with distinct challenges—from keeping original structures to repurposing amenities—that require meticulous planning.

One recent example is FOUND Study Turtle Bay in New York City. Students now call a former Marriott Hotel home after BDB Construction Enterprise turned the historic, 34-story landmark at 525 Lexington Ave. into a 1,355-bed student housing community. Multi-Housing News asked Tallal Bhutta, the CEO of the company and an experienced construction engineer to expand on the math behind successful conversion projects.

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How do you see the adaptive-reuse trend shaping the future of student housing and what are some factors contributing to its growing popularity?

Bhutta: After the pandemic, we saw a resettling of real estate values, with fluctuating prices and other fundamental changes in asset classes. Those shifts opened opportunities for conversions in certain building types, everywhere from Berkeley, Calif., to Boston, including mixed-use, apartments, dormitories and hotels. In several cities, officials and developers identified student housing as a critical need, hearing from both universities as well as students who were vocal about the lack of supply and high costs.

This is the case in New York and San Francisco, markets with historically high housing costs as well as many colleges and universities in the center city that don’t hold enough housing for their resident students. Some students commute, others find their housing and others choose different places to study that are more economical.

Yet, with rising enrollments and housing markets tight, the situation is difficult—there have been protests in various cities, including Berkeley, Calif.; West Chester, Pa.; Highland Heights, Ky., and in Amherst and Waltham, Mass. Students are protesting the lack of housing, the quality of the offerings, as well as lack of accommodations for disabled students.

What particularities do you consider when selecting buildings for value-add initiatives, especially in dense, urban environments like New York City?

Bhutta: Location and layouts are most important, of course, though we often look at the building systems first because there may be many comparable available buildings that could be converted to housing, including market-rate apartments or student residences. Key characteristics for hotels, which can be ideal for conversion to student housing, include whether the existing guestrooms have fire-protection and life-safety systems, built to code, that are relatively simply converted for compliance as apartments or student residences.

In cases where there aren’t adequate sprinkler systems or full-building fire alarm systems, it can take a lot of time and money for that retrofit alone. Hotels offer that opportunity, as many have building-wide systems that make the buildings more advantageous to conversion. Generally, building conversions are not easy to do, but we work to make them easy to accomplish by targeting the key variables first.

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Tell us more about the most recent conversion or adaptive-reuse projects you were involved in and the unique challenges that come with reviving old or unused buildings. What role does cost-effectiveness play?

Bhutta: Our projects include a 31,000-square-foot, 1925-built manufacturing building in the Bronx that we’ve just converted to mixed uses and a house of worship. Additionally, we have two buildings at the massive Brooklyn Watchtower complex, where we adapted and renovated more than 150 apartments—60,000 square feet in total—in less than a year.

These two projects were existing structures with load-bearing structural systems and existing mechanical, electrical and plumbing systems that could be approved for their proposed uses. The Bronx conversion required new windows and both recent projects had to comply with energy codes and other requirements for the new uses.

Cost-effectiveness is essential—often it’s a primary consideration alongside schedule—and it has been increasingly important over the last year, with the lending climate still affected by interest rates. We look at everything through the lens of cost-effectiveness: use of materials, construction methodology, existing and new MEP systems, lighting systems—everything you need to factor in costs. There is always a give and take in what you can afford and what is most suitable for adaptive reuse or conversion.

As an aside, accurate drawings are essential to this process. If the project drawings are incomplete or missing key information, it becomes a huge challenge for the owner or developer. Another observation is that construction planning doesn’t happen in one day, it takes place over the entire project life cycle.

Last year, you completed FOUND Study Turtle Bay, a student housing community in a former hotel that closed its doors in 2020. How did you preserve the century-old Romanesque Revival details of the building while incorporating modern elements? 

Bhutta: We are doing several building projects nationally with similar challenges: turning hotels into inspiring, lasting student residences with shared amenities and a wonderful quality of life. This large-scale adaptive reuse of an iconic landmark hotel building in Manhattan earned buy-in from several major university tenants. Our creative, proactive approach anticipated likely construction challenges in the 1923 masonry-clad structure to convert 80 percent of the 35-floor building from hotel rooms to student residences in about seven months, from start to occupancy.

The conversion required both the restoration of existing period finishes and the reorganizing of interior spaces and building systems. To further ease the process, BDB led the project management team with design assistance and MEP advisory direct to the owner and architect, as well as an aggressive campaign to identify hidden engineering challenges and use clash detection to ensure a smooth construction process.

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What amenities does FOUND Study Turtle Bay provide and how do they cater to the needs of today’s students? 

Bhutta: Today, the community greets students with its modern reception lobby, beautiful resident suites, a shared, open kitchen facility with multiple cooking stations and a new study room and gym on the second floor, adapted from former hotel executive offices. Tenants there now include students from the New York Institute of Technology. Whether they are students or interns, the residents enjoy off-campus housing with furnished, turnkey private and shared units in a major market with extensive communal amenities, including 24-hour security, high-speed internet, on-site laundry and access to FOUND Study’s promotions, discounts, and other services.

Is it really possible to provide affordable student and intern housing in high-cost cities like NYC? What do you do to make adaptive-reuse projects pencil out?

Bhutta: It’s possible in every market. The hotels-to-dorms projects, for example, took only seven months from a signed contract to the issuance of a temporary certificate of occupancy. Speed is a critical ally. As a result, iconic former hotels now offer housing or support local universities, disused manufacturing buildings have become mixed-use magnets and office buildings are finding new life with residential or cultural uses. The projects often point to the benefits of integrated project delivery (IPD), an approach involving the general contractor in the earliest phases of site selection, project definition and scheduling. Most critical are the early reviews of existing conditions and potential stumbling blocks.

Some major markets don’t allow design-build contracts, or their construction industries have a widespread culture of slow-rolling projects or using change orders indiscriminately. Real estate leaders are learning ways to work with existing rules and using better methods of predicting challenges, especially unforeseen conditions. Construction companies can also rise to the challenges of adaptive reuse, addressing changes in work scope while also improving owner-contractor coordination. IPD is just one approach but I think it’s a big opportunity to surmount barriers to adaptive reuse by improving key performance areas: quality, project changes, schedule, building team communications and even financial return.

Tell us more about other adaptive-reuse projects that BDB Construction Enterprise worked on/is working on. Why are these types of projects attractive for companies like yours?

Bhutta: Another hotel conversion we did created apartments with kitchens from the former Doubletree Hotel in Manhattan. There were significant challenges, including our retrofits of aging MEP systems, extensive façade restoration and the rerouting of ample plumbing and electric capacity—hotels tend to oversize their systems, fortunately—to supply the tenants’ new kitchens. That was a six-month project, and the building opened on schedule for institutions including the City University of New York and LIM College. We’re doing another conversion project like this in Rhode Island and consulting with similar works in different states.

How do you plan to further expand and enhance student housing options across the country through adaptive-reuse projects?

Bhutta: We are supporting and will continue to support those colleges and universities and developers serving them. Most of these projects will be renovations or conversions, which are quite varied but require a particular mindset. The approach is consistent whether they are very well built, like the Marriott Midtown hotel, or like our Elizabeth building project, which had broken windowsills and heads, making it inefficient to operate and uncomfortable for tenants.

Both projects are historic landmarks, so we work very carefully and within applicable local, state and federal standards to protect their façades and other elements. So, developers and owners, as well as higher education institutions themselves, can find ways to reimagine both historic and non-historic structures. In some markets, the older buildings are the most likely to be available at advantageous valuations and that will bring us to more such opportunities around the country.

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