An aging hotel in San Mateo could get a new life as more than 500 units of housing.
The Residence Inn San Francisco Airport/San Mateo is being proposed for conversion into 555 apartments in an unspecified number of five- to eight-story buildings, the San Francisco Business Times reported. The 4.3-acre site at 2000 Windward Way is owned by Chatham Lodging Trust, which focuses on extended-stay properties under the Residence Inn brand.
Chatham, with the help of Marcus & Millichap subsidiary Institutional Property Advisors, is looking to sell the 160-key hotel to a developer who could turn the property into housing. An asking price hasn’t been made public, but county records value the property at $34 million.
San Mateo, like many other Bay Area cities, is working to meet the housing shortage crisis as more tech and artificial intelligence workers flock to the region. Under the state’s required housing element, San Mateo must zone for at least 7,015 homes by 2031. The city entitled more than 2,100 homes between 2018 and 2023, according to the Business Times.
Adaptive reuse endeavors such as the Residence Inn housing proposal have become increasingly popular thanks to California’s high multifamily construction costs when building something from scratch. In 2023, developers set a new record by converting 4,556 hotel units across the country into apartments, marking a 39-percent increase from the year before and nearly double the conversions in 2021, according to RentCafe.
The proposed redevelopment of the Residence Inn comes amid a bevy of financial issues plaguing hotels across the Bay Area, including loan defaults and foreclosures.
In San Jose earlier this month, an affiliate led by Texas-based hotelier Jagmohan Dhillon, the owner of a dual Motel 6 and Super 8 by Wyndham, defaulted on a $21.7 million loan from Choice Hotels International. Another Dhillon affiliate that owned the Super 8 by Wyndham in Livermore defaulted on a $7.7 million loan from the State Bank of Texas, The Mercury News reported. The University Inn & Suites in Berkeley also went into foreclosure and is headed into bankruptcy.
Oakland lodging in particular has suffered during the downturn over the past year.
The city’s largest hotel, the Oakland Marriott City Center, went into default in February after a $100 million loan default. The Waterfront Hotel in Jack London Square closed in January; that same month, lenders for the Radisson Hotel Oakland Airport sued to foreclose on the property. The Hilton Oakland Airport closed its doors in August. And in July, Hawkins Way Capital defaulted on a $112 million loan on the AC Hotel and Residence Inn by Marriott in downtown Oakland. — Chris Malone Méndez
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