Crown House - an £8m Sheffield office block built in 2008 but never occupied - has been sold for student flats.
London and Scottish Student Housing snapped up the seven-storey building on West Bar for £3m.
It plans to spend £20m building two more blocks to create a 350-bed complex set to include apartments, a gym, study, cinema and games rooms and a bookable dining room for dinner parties.
It is also set to include a private courtyard and a public ground floor coffee shop. A planning application is due to go in later this month with the site opening for Septebmer 2017.
The Sheffield-based Manzoor family built the property. But the recession hit when it was half finished and finding a tenant proved impossible. They finally defaulted on the mortgage in 2014 and it was repossessed by the bank.
The new scheme continues a trend for self-contained student flats which has seen them spring up across the city.
But Ciaran Little, managing director of LSSH, said there was still plenty of demand because both universities were growing.
He added: “Students these days are looking for really good facilities where they can work and meet friends. We are trying to create a community in the building.
“This is the first acquisition for LSSH. It gives us a great opportunity to start a portfolio of student accommodation and provide a quality alternative for students in Sheffield, a vibrant city with two strong universities. We look forward to working with the local authority to regenerate the site, which has been unoccupied since it was built in 2008.”
In 2010 Zulfi Manzoor, said: “No-one knew the crisis was going to be so bad and by then it was too late. A year earlier, maybe we could have found a tenant. A year later and we might have shelved the plans. As it is, it is the worst commercial decision we have ever made.”
Several student flats projects are underway, or have recently been completed, in Sheffield including New Bank House, on Bank Street, 397-bed Sharman Court on Broad Lane, 152-bed Spectrum by Pinnacle, on Milton Street, and the former Telephone House on Charter Square.