Chinese Investor Sells Silicon Valley Hotel In $117.5M Deal
The 353-room Hilton San Jose has sold for $117.55M, JLL Hotels & Hospitality, which arranged the sale, said on Monday.
The seller, China-based Han's Holdings Group, acquired the 18-story downtown property for $87.3M in 2017 from DiNapoli Capital Partners.
JLL Hotels & Hospitality arranged the deal for the seller and was led by JLL Senior Managing Director John Strauss and Executive Vice President Mark Fraioli. The brokerage did not disclose the buyer of Hilton San Jose, which is located at 300 Almaden Blvd.
The downtown hotel is connected by skybridge to the 550K SF San Jose McEnery Convention Center, the largest convention center in Silicon Valley. It is also closely neighboring more than 10M SF of office space, according to JLL.
Along with factors like 17M SF of office space in various stages of San Jose's pipeline (by JLL's count, and inclusive of Google's nascent Downtown West project) and renovation work started by the seller last year, Fraioli says the offer price made Hilton San Jose attractive.
"If you were to take the sale price and divide it by the room count, you'd be at about $330K per key, and I expect the buyer will put another $9M in," Fraioli told Bisnow. "So, all told, your investment level is probably in that mid-$300K per key range, and that is a significant discount to whatever you could possibly build [the hotel] for."
Generally, Fraioli says his team is encouraged by the vitality of hotel capital markets in San Jose, following the sale of not only 300 Almaden Blvd., but also the AC Hotel acquisition last year by AVR Realty.
In April, the New York-based investor bought the 210-room, Marriott-branded hotel for $95.4M, or about $454K per room. JLL Hotels & Hospitality also helped arrange that deal, Fraioli said.