DORMITORY - Allowed in Sacramento?

Question

Hey BP,

I'm a local broker, investor, and Airbnb PM (~120 listings).

Some partners and I are very interested in "adaptive reuse" and converting old commercial / industrial property for residential use.

Can it be done? We've seen big players like Vivo Living doing this across the country with big multifamily projects. I was thinking about something smaller, 4000-6000 sqf, and creating a dormitory... think college-style or hostel. Lots of community space and amenities. Onsite property management.

Who knows a great architect? I've spoken with a few and so far none have ever successfully completed one of these projects. :(

Noah Laker · Answer

We've identified a couple of possible sites and spoken with a couple architects. Nothing great so far. Waiting for the finance guys to come back on it.

Michael Baum · Answer

Ok @Noah Laker, so have you found a building? Have you interviewed any potential firms?

My son is studying to be an architect right now so I will ask him what he thinks. He already has a building he designed being built and won a couple of awards for his structures so he might have an idea.

Noah Laker · Answer

Dormitory is allowed by right in many zones, some R and some C and even some SPD's. (I made a list)

My concern is more in terms of the architecture; bringing a commercial space up to residential standards :(

Nik Moushon · Answer

@Noah LakerDormitory buildings are restricted to being tied to a institution (college or university). You are going to have a nearly impossible time getting that approved outside a college campus. Hostels are hotels. Thats a commercial use, so it would be easier to do in an office building, BUT, thats transient stays only. Not rentable apartments. You can do LTR where you rent the room and have a shared kitchen and bath, but you have limits on how many bedrooms can share one kitchen/bath...besides common sense. There also the demographic to consider as well and if that is even a viable business model. As for converting any office space to apartments....it can be done. Every city will be different though. Not only zoning law restricting where this can happen but also the buildings HOA (if you are taking a couple floors of a large building vs buying the entire building). There are plenty of ways to try and get variances and special city council approval but thats a LONG and EXPENSIVE process. So choose your location wisely and do lots of research. And yes, you will need to find an architect for change of use and occupancy. But that comes after you figure out if you are even allowed to in your city.

Michael Baum · Answer

Hey @Noah Laker, this is all going to depend on the zoning. It will have to be some kind of commercial zoned to get a building like that. Some municipalities don't allow residences in commercial zones.

You need to talk to the city. Find out what zones could have this sort of setup. You are talking about dozens of people inhabiting a co-op type place. There are often a lot of restrictions on something like this. You need to get with the city.