Korean Firm Pays $64 Million for San Jose’s Iconic Sainte Claire Hotel
Korean Firm Pays $64 Million for San Jose’s Iconic Sainte Claire Hotel
The Mercury News
06/29/17
Korean Firm Pays $64 Million for San Jose’s Iconic Sainte Claire Hotel
By George Avalos
SAN JOSE — A Korean resorts operator has scooped up the Westin San Jose — more commonly known as the Sainte Claire hotel — in downtown San Jose, paying $64 million for the iconic property, an indication of interest by foreign investors in the robust Silicon Valley economy.
Aju Hotel Silicon Valley, an entity controlled by Aju Hotels and Resorts, bought the historic Westin San Jose on June 15, according to Santa Clara County property records. Aju Hotels is a developer and operator of hotels in South Korea and the Bay Area, according to the Aju website.
“This investment shows that Silicon Valley is a hot market for hotels right now,” said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the California lodging market.
The purchase comes on the heels of other recent hotel acquisitions and construction of new lodging properties in San Jose.
“There is no question that San Jose is one of the best hotel markets in California in terms of being desired by buyers,” Reay said. “San Jose is in the top three, along with San Francisco and the west side of Los Angeles.”
The Aju lodging firm is a unit of Aju, a construction, finance, real estate, automotive and information technology services company, the company’s website shows. All the Aju firms are based in South Korea.
The seller was SCH Hotel, an affiliate of Wolff Urban Development, a firm controlled by developers Keith Wolff and Lew Wolff. Lew Wolff is a former co-owner of the Oakland A’s.
The Wolff group appears to have made a huge profit on the Sainte Claire hotel. In 2011, a Wolff partnership paid $17 million for the 171-room hotel, located at 302 S. Market St., at the corner of West San Carlos Street.
“That is a pretty good return on the hotel,” Reay said. The $64 million purchase price works out to roughly $376,000 a room, according to Reay.
In early June, Blackstone Group, through an affiliate, paid $65 million for the 236-room Hyatt Place hotel, according to a filing on the Blackstone website. That price would work out to about $275,000 a room. That hotel previously sold for $53.4 million in 2015, according to Reay.
New hotels have opened in San Jose this year — the 210-room AC Hotel and the 44-room Hotel Clariana, both in the city’s downtown.
And more hotels are in the works in San Jose, including the 279-room Tribute Hotel and a 173-room Kimpton Hotel, both in downtown, and a 145-room Homewood Suites by Hilton near the corner of North First Street and Highway 237 on the north end of the city.
The Westin San Jose (Sainte Claire hotel) is the second known purchase by an Aju unit in the Bay Area. In 2015, a unit of Aju Hotels and Resorts paid about $53 million for the 354-room Holiday Inn at 1350 N. First St. in San Jose.
“It’s unusual for a Korean company to be buying up commercial real estate in the Bay Area,” Reay said. “The majority of hotel investments in California on the part of overseas buyers usually comes from China.”
