By Ariela Moraru
InfiniPower Hospitality Group is developing two co-branded Marriott hotels in North San Jose. Johnson Hospitality will manage both the 147-key Marriott Residence Inn and the 114-key Fairfield Inn & Suites, for which CBRE has arranged $54 million in construction financing. Huff Construction will be the general contractor for the four-story project slated for completion by mid-2019.
CapitalSource provided approximately $35 million, while Canyon Partners Real Estate provided $19 million in preferred equity. John Nelson and Erik Franks of CBRE’s San Francisco office arranged the 60-month fixed and floating structured financing on behalf of the developer.
The co-branded hotel will include a swimming pool with outdoor seating and fire pits, sports court and putting green. Bounded by Highways 237, 101 and 880, the property is within one mile from Levi Stadium and Great America Theme Park and close to San Jose International Airport.
InfiniPower Hospitality plans to develop the property on a vacant 6.7-acre site purchased in 2006, according to The Registry. The parcel is part of a larger 70-acre area known as the Legacy Terrace/America Center Development, which includes office buildings and a 175-key Aloft Hotel. The area zoning was first approved by the city in 2000 and entitled up to 900,000 square feet of office space, 90,000 square feet of commercial/hotel space and 25,000 square feet of riverfront-oriented commercial use.
The 164,000-square-foot project is located in the heart of Silicon Valley. Other hotel developers have taken note of the market heating up, with AECOM Capital and Ensemble Real Estate Investments developing a 250-key Marriott Autograph Collection hotel scheduled to open in 2018, some 15 miles away from InfiniPower’s project.
Despite an extremely challenging capital markets environment for construction financing and particularly hospitality financing, we were able to attract numerous capital sources and secure a very competitive financing solution for the sponsors that provided the flexibility they needed,” said Nelson, CBRE executive vice president, in prepared remarks.
InfiniPower’s portfolio includes two other hotels in Sacramento-area, 95-key SpringHill Suites by Marriott and 104-key Fairfield Inn & Suites by Marriott.
Renderings courtesy of CBRE