Bisnow
01/13/20

Hilton Hotel in Downtown San Jose Is Sold for More Than $117 Million
Hotel tower next to downtown San Jose convention center changes hands
By George Avalos

Hilton Hotel in downtown San Jose is sold for more than $117 million

SAN JOSE — The iconic Hilton Hotel in downtown San Jose has been sold, real estate brokers said Monday.

The 18-story hotel tower was sold for $117.55 million, according to JLL, a commercial real estate firm that arranged the sale of the prominent lodging facility.

“Hilton San Jose is proximate to a plethora of Fortune 1000 corporations, including some of the most recognizable names in technology today,” said John Strauss, a JLL senior managing director.

The hotel is directly connected via a sky bridge to the San Jose McEnery Convention Center in the downtown of the Bay Area’s largest city.

JLL noted that the transaction has occurred at the same time that a major development boom has begun to sprout in downtown San Jose.

“San Jose is in the midst of an urban renaissance with millions of square feet of new office space in the pipeline,” Strauss said.

The hotel includes 18,000 square feet of meeting and event space, an outdoor pool, 24-hour fitness center, business lounge, and the Affinity Restaurant & Bar.

The Hilton San Jose is located at 300 Almaden Blvd. near the intersection of West San Carlos Street. The 550,000-square-foot convention center wraps around two sides of the hotel.

“Hotel development opportunities in Silicon Valley are limited and challenging due to the general lack of available sites, lengthy entitlement process, extremely high labor costs and competition from other commercial real estate uses,” said Mark Fraioli, a JLL executive vice president.

The latest price for the hotel points to sharply rising values for commercial properties in downtown San Jose.

The seller of the hotel, China-based Han’s Holdings Group, bought the Hilton San Jose in 2017, paying $87.3 million, according to research compiled by Irvine-based Atlas Hospitality Group.

In 2019, the owners launched a renovation of the hotel, a facelift that is slated to be completed sometime in 2020, said Alan Reay, president of Atlas Hospital, which tracks the California lodging market.

These sorts of upgrades could be a wise move for an older hotel such as the Hilton San Jose.

“There is quite a lot of new supply of hotel rooms coming into the market,” Reay said. “This hotel was built in 1989. You have to make a lot of renovations to older hotels so they can stay competitive.”