California State Northridge could soon become the latest school to have a business-class hotel on campus.

CSUN is looking for a private developer to partner with on the facility, which could generate more than $2 million a year in income, according to a market analysis commissioned by the university.

It would join Cal Poly Pomona and Cal State Fullerton, two other colleges in the region with on-campus hotels.

Kimberly Ritter-Martinez, an economist with the Los Angeles County Economic Development Corp., said CSUN would benefit from a hotel on several fronts.

“It’s an opportunity to help with student enrollment, it will increase the school’s visibility and increase the school’s attractiveness and attract more people to the campus,” Ritter-Martinez said.

Growing trend

While not particularly common in Southern California, campus hotels are a growing trend in other parts of the country.

The New York Times reported last month that Chicago-based Graduate Hotels plans to build 14 facilities near colleges and universities by 2019. The company already has developed six campus facilities, including in Ann Arbor, near the University of Michigan; in Charlottesville, close to the University of Virginia; near the University of Georgia Athens; and in Oxford, near the University of Mississippi.

What makes campus facilities attractive for hotel chains is that they have a built-in customer base with visiting students and their families, conference attendees, job candidates, visiting athletic teams and their fans.

Years of planning

CSUN, which now has about 40,000 students, has been considering adding a hotel for about two decades. The effort picked up momentum last year after a market analysis concluded the project, which could cost $60 million, is feasible, officials said.

“It never seemed that the timing was right to do it. It was in late 2014 when we decided the need was there and the economics were right,” said Colin Donahue, CSUN’s vice president for administration and finance and chief financial officer. “If everything goes as projected, we hope to get the hotel open in about mid-2019.”

The California State University Board of Trustees approved the concept for the project in November 2015. CSUN wants to partner with a nationally known hotel brand and is evaluating four proposals. The school hopes to select a development partner by early next year.

The hotel would be built on 3 acres at Nordhoff Street and Matador Road, on land that houses the university’s aging Orange Grove Bistro and University Club. It will be adjacent to the school’s orange grove of more than 400 trees and close to the Valley Performing Arts Center.

The school offers a master’s degree in tourism, hospitality and recreation, and students in that program would benefit from having a hotel on campus, Donahue said.

The development will be privately funded and the university would share in the revenue, officials said.

Financial projections

A market analysis for the hotel project was conducted by PKF Consulting Inc., a unit of the Los Angeles-based commercial real estate firm CBRE.

“Our recommendation is for a 150-room full-service hotel that will include meeting space, food and beverage outlets, business center and sundry store,” PKF said in its analysis.

It projects occupancy of 70 percent for the first year and the hotel could generate an estimated $2.1 million in net operating income, according to the market analysis. That could increase to 78 percent occupancy and produce $3.45 million in net operating income by the middle of the next decade.

The average daily room rate is projected to start at $154 a night and grow to $201 by 2026.

CSUN’s hotel would be able to compete with 12 other full-service facilities of comparable size in the area offering a total of 2,255 rooms. They range in size from the Warner Center Marriott with 474 rooms to the 86-room Holiday Inn Express & Suites in Woodland Hills, according the analysis.

Marriott runs the hotel at Cal State Fullerton, and Cal Poly Pomona has the Kellogg West Conference Center and Hotel.

The latter was built in the early 1970s and is operated by the university’s foundation. It averages a 60 percent occupancy rate, said foundation executive director G. Paul Storey.

“Over the years, it’s worked out tremendously. At one point we were the only (college) in California that had a conference center and a lot of universities now have hotels,” Storey said. “The hotel is beneficial to the students, staff and visitors. And it does generate some income to help pay for maintaining it and some goes back to support the university.”

CSUN’s 356-acre campus falls within the area served by the Northridge East Neighborhood Council. While the neighborhood council hasn’t yet taken a position on the project, they have expressed concerns about the height of the hotel and the impact on area traffic, said council president Glenn Bailey.

“We’ve dealt with some mixed use projects along Reseda Boulevard and said there needed to be more parking, and they complied,” Bailey said. “We hope we’d be the first one they (CSUN) call when they make their presentation.”