OTO Development Buys Sunnyvale site for $21MM, Plans 238-Room Hilton Garden Inn

OTO Development, Sunnyvale, Hilton Garden Inn, San Francisco, Bay Area, Saratoga

OTO Development, Sunnyvale, Hilton Garden Inn, San Francisco, Bay Area, Saratoga

By Vladimir Bosanac

In an transaction that closed at the end of May 2017, Spartanburg, South Carolina-based OTO Development purchased the Club Monaco and Palladium nightclub, an entertainment and restaurant located at 767 North Mathilda Avenue in Sunnyvale that is in a nearly 16,000 square foot building constructed in 1964. The property sold for $21 million, and the seller was Saratoga, CA-based entity called Sinogap LLC, associated with Gary E. Pagonis.

The new development will feature a brand new, 238-room, six-story Hilton Garden Inn, a project that had been approved by the City of Sunnyvale’s Planning Commission in early November 2016. The architect of record is Oakland-based Architectural Dimensions.

The new proposed development will be next to one of the buildings occupied by LinkedIn, and just a few blocks from the business social enterprise’s larger campus. Other companies in the close proximity to the development are Apple, Beam Reach Networks, Riverbed Technology and Abbott, to name a few. A Motel 6 location is on the same street as the planned development, and Larkspur Landing Sunnyvale Hotel is just across the street. It is undoubtedly a very prominent location that will likely be frequented by the visitors conducting business with the companies in the vicinity of the hotel.

The site has been used as nightclub and restaurant for years, but in 1993, the city selected the site for intensified development of industrial or office uses by allowing up to 100 percent Floor Area Ratio. Hotels and motels were considered as a conditional use.

Hotel sales in 2016 have slowed down across California, as the market pulled back from a very active 2015, according to the most recent, California Development Survey by Atlas Hospitality Group. Santa Clara County has six hotels with 893 rooms under construction, with the largest being the 210-room AC Hotel in San Jose. Overall, the county has 46 hotels with 7,711 rooms in planning, a 42 percent room count increase over 2015, according to the same report. This represents the largest number of planned hotels and rooms across all Northern California counties.

Overall, in California hotels saw positive room revenue increases in 2016, well ahead of the national average.

West Coast Commercial Real Estate News