San Jose’s Wingate by Wyndham Trades for $21MM, Will Switch to Hampton Inn

Northern California, San Jose, Wingate by Wyndham, Magna Hospitality Group, Arcadia Development, Hampton by Hilton, San Francisco, Santa Clara, Hotel Adagio, Park Hotels & Resorts, Atlas Hospitality Group

By Vladimir Bosanac

Even as hotel property sales across the state of California slide this year form a record year in 2021, hotel sales across Northern California continue to trickle in. In San Jose, the 115-room Wingate by Wyndham hotel, a three-year-old property located at 5190 Cherry Ave., has been purchased by an affiliate of Warwick, Rhode Island-based Magna Hospitality Group for $21 million, or $182,608 per room, according to a report by the San Francisco Business Times. The seller was Arcadia Development.

The 3-star hotel will be changing its flag to Hampton by Hilton, according to the report, which is a brand that is moderately priced, budget to midscale limited service hotel with limited food and beverage facilities. This hotel is located 6 miles from the San Jose Convention Center and 6 miles from the Children’s Discovery Museum of San Jose. The San Jose Institute of Contemporary Art is just as far, as is the Happy Hollow Park and Zoo. The Mineta San Jose International Airport is a little further from the hotel at a distance of nine miles.

The new owner, Magna Hospitality Group is a privately-held hotel real estate investment firm that is dedicated exclusively to hotel investment, development and management, according to the company’s website. Throughout its history, Magna has owned or operated hotels in virtually every region of the United States, as well as Canada. Magna is approved to own and/or operate national franchise brands with Hilton, Marriott, Hyatt and InterContinental Hotel Group.

The company was involved a year ago in a purchase of a San Francisco property. The company purchased 171-room Hotel Adagio, Autograph Collection for $82 million, or approximately $480,000 per key, from Park Hotels & Resorts in July of 2021, according to previous reporting by The Registry. It marked one of many hotel sales across the state of California, which saw record sales during that year, according to a report by Newport Beach, Calif.-based Atlas Hospitality Group.

The hotel industry across California saw one of the busiest transactions yeas in 2021, which has seen a decline in 2022. According to a recent, Atlas Hospitality Group’s 2022 Mid-Year California Hotel Sales Survey, in Santa Clara County during the first half of the year, the most expensive sale was for the 170-room Westin San Jose, which traded for $62.3 million, or $366,470 per room. In Santa Clara County alone, Atlas recorded individual sales declining by 35 percent and the dollar volume sliding even further by 68.6 percent. At the same time, the median price per room declined by 25.9 percent.

Although sales cooled off somewhat during the first half of 2022 across the state as compared to the record pace set during the same period last year, it still logged in as the second highest number of sales on record and the third highest in terms of dollar volume, according to Atlas.

The company does see the pace of transactions in the second half of the year slowing further as uncertainty around the rising cost of debt and the direction of the economy may pose a challenge for investors in the future.

West Coast Commercial Real Estate News