Han’s Holding Group has sold the 353-key Hilton San Jose for $117.6 million to an undisclosed buyer. The Chinese developers sold the hotel without any existing management agreements and Hilton Hotels will manage the hotel going forward, according to JLL, who arranged the deal.
Located at 300 Almaden Blvd., the 18-story hotel offers 18,375 square feet of meeting and event space while also being connected to the San Jose McEnery Convention Center by a skybridge. The Hilton San Jose is also located near the San Jose Performing Arts Center, San Jose State University, the SAP Center and Levi’s Stadium. The hotel’s amenities include a heated outdoor pool, a fitness center, a business lounge and on-site dining through Affinity Restaurant & Bar.
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JLL’s Senior Managing Director John Strauss and Executive Vice President Mark Fraioli led the team on the transaction. Strauss noted in a press statement that the hotel is nearby several Fortune 1000 corporations, including some of the most well-known names in the tech industry. He added that San Jose is also experiencing an urban renaissance with millions of square feet of new office space in the works.
The hotel will also undergo upgrades in 2020 as it was sold subject to pending comprehensive renovations, according to JLL.
Development Hitch for Hotels
The Hilton San Jose was a rare opportunity as building hotels in Silicon Valley is difficult due to the lack of available space, the lengthy entitlement process, high labor costs and competition for other commercial space uses, Fraioli noted. But these same limiting factors for hotels in Silicon Valley can be seen throughout the country.
According to JLL’s 2019 second half report on the U.S. hospitality sector, labor shortages and rising costs are hitting the hotel industry hard, leading to an expected decline in the development pipeline in 2020. The report added that 2019 will likely see peak levels of new hotel rooms, with the rate stabilizing after.
In March, Ellis Partners sold the DoubleTree by Hilton Hotel Campbell-Pruneyard Plaza for $59.1 million. Also located in Silicon Valley, the hotel was part of a mixed-use complex with three office buildings and a shopping mall.