**San Jose Hotel May Transform Into Residential Hub Amid Challenging Market**
A hotel complex in San Jose could soon be reborn as a residential hub, according to a new proposal filed at City Hall—a fresh indication that the region’s lodging sector continues to struggle in a difficult economy.
The Sonesta ES Suites hotel at 1602 Crane Ct. in North San Jose is the focus of the proposal. Plans submitted to the city’s Planning Department suggest the 114-room hotel, which consists of a cluster of seven buildings, could be converted into apartments or condominiums.
> “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.
This conversion proposal comes at a time when the Bay Area hotel market is facing loan defaults, foreclosures, and plummeting property values as the sector works to recover in the 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. Reay explained that suite hotels already include multiple features suitable for residential living. “Suite hotels have a living room, a separate bedroom, and a kitchen,” he noted.
Located in a section of North San Jose dotted with tech company offices, the hotel sits near the corner of Zanker Road and Bering Drive. The hotel is currently owned by an affiliate of Hospitality Properties Trust, and the conversion proposal is being led by Jay Shah, vice president of development at Kalthia Group Hotels.
If the conversion moves forward, future apartment residents would have access to a range of existing amenities on the property, according to planning documents.
> “The existing pool, weight room, and meeting rooms would add amenities for the future residents,” the application states.
The applicant may seek a general plan amendment to designate the property for residential or mixed-use development. An affordable housing component is also being considered.
> “The applicant would be willing to provide 100% of the units for affordable housing if entitlement concessions are available by means of city policies,” according to the application.
As this proposal is still in its early stages, more details are expected as the project proceeds through the city’s review process.
https://www.mercurynews.com/2025/11/14/san-jose-hotel-home-build-economy-property-real-estate-develop-travel/
