The interest in downtown San Jose’s properties continues unabated. According to a report by the San Jose Mercury News, the 805-room Fairmont Hotel in downtown San Jose’s core sold to San Ramon-based Eagle Canyon Capital for $223.5 million, or approximately $277,640 per room. The hotel, which is located at 170 South Market Street in San Jose, is currently owned by St. Louis, MO and Los Angeles, CA-based Maritz, Wolff & Co., which it acquired in 1995.
According to a report by the San Francisco Chronicle from August of 1995, San Francisco’s Swig family had sold its two-thirds stake in the hotel for an undisclosed sum to Wolff’s company and an unnamed third party. This was speculated at the time to be Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud, who was projected to own one-third of the property.
According to sources with knowledge of the ownership structure, The Swig Company also owns a minority, non-controlling stake in the San Jose hotel, which will be sold to Eagle Canyon as part of the transaction.
The Fairmont San Jose opened its doors as the first luxury hotel in the Silicon Valley in October 1987 and today is one of the city’s most thriving downtown hotels. It was extensively renovated and expanded with the addition of the Fairmont Tower in 2002, giving the hotel a total of 805 guest rooms, 77 suites and 65,000 square feet of meeting and event space.
According to the latest report, Maritz, Wolff & Co. Co-founder and Chairman Lew Wolff stated that the entities are in contract and the close will likely occur sometime in January 2018. The sale is slated for the hotel property only. The retail portion of the property, which is located on the ground floor of the annex, as well as the garage, which is owned by the Successor Agency to the Redevelopment Agency, are not part of the sale. The garage property has a long-term agreement with the hotel, and it will remain as part of the Successor Agency’s portfolio.
The other Fairmont assets in Northern California have also traded in the last couple of years or so. In February of 2016, New York-based Carey Watermark Investors announced that it had acquired from Fairmont Hotels & Resorts the remaining 25 percent interest in the Fairmont Sonoma Mission Inn & Spa, bringing its ownership of the property to 100 percent. The company had acquired its original 75 percent joint venture interest from Fairmont in July 2013.
In October of 2015, South Korea-based Mirae Asset announced the company’s intent to purchase the Fairmont Hotel in San Francisco for $450 million. Mirae Asset, one of Korea’s largest financial services firms, bought the asset from Woodbridge Capital Partners and Oaktree Capital Management.