While the volume of hotel sales in the Bay Area and across the state of California has slowed in the last two years, as downtown San Jose garners more attention from employers like Google and investors from across the globe, the self-proclaimed capital of Silicon Valley attracted one foreign buyer to its iconic Westin San Jose, previously known as the The Sainte Claire Hotel. The buyer is the hospitality arm of the South Korean conglomerate Aju Group, which paid $64 million, or just over $374,000 per room, according to public records reviewed by The Registry. The seller of the property was an entity associated with Los Angeles-based Wolff Urban Development, which had owned the property since 2011. Westin San Jose is located at 302 S. Market St.
Aju owns another San Jose hotel, the 354-room Holiday Inn, located at 1350 N. 1st St., for which it paid $53,450,000 or close to $151,000 per key in January of 2015, according to public records.
Westin San Jose is a hexagonal, six-story structure that was built in 1926 and is today on the National Register of Historic Places. The hotel was designed by the prominent San Francisco architectural firm of Weeks and Day, according to the hotel’s posting on Wikipedia, which was well noted for both their theater and hotel designs across the state of California. Interior similarities exist between San Jose’s Sainte Claire and the Mark Hopkins Hotel in San Francisco. Renaissance Revival detailing is basically derived from the Italian Renaissance tradition, though there are several references to French, Spanish and Mediterranean Revival architecture, states the posting.
The hotel was restored in 1990, when it was known as the Hyatt Sainte Claire. It was renovated again and rebranded The Westin San Jose in July of 2015.
The sale comes on the heels of another sizable hotel purchase in San Jose. Earlier this month, Blackstone Real Estate Income Trust (BREIT) paid $65 million, or $275,423 per room, to acquire the 236-room Hyatt Place San Jose. The property also included an adjacent 261-space parking garage. The hotel is located across the street from the McEnery Convention Center and near the corporate offices for Adobe, Ernst & Young and Deloitte.
BREIT stated on its website that the downtown San Jose lodging market benefits from strong fundamentals. 2016 RevPAR growth in this market was 9 percent versus 3 percent nationally.
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.