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New High-end Hotel Brand Arrives in Silicon Valley

Silicon Valley Business Journal
12/05/16

New High-end Hotel Brand Arrives in Silicon Valley
By Bryce Druzin

http://www.bizjournals.com/sanjose/news/2016/12/05/new-high-end-hotel-brand-arrives-in-silicon-valley.html

 

A new hotel brand has taken over the former site of Beverly Heritage Hotel in Milpitas.

The 236-room hotel is now Sonesta Silicon Valley. Sonesta International Hotels Corp. has more than 60 hotels in seven countries, including 37 in the United States, but the Milpitas location at 1820 Barber Lane is their first hotel on the West Coast.

“We’ve had aspirations on California for a long time,” said Carlos Flores, Sonesta president and CEO. “Silicon Valley being a very unique market in a very fruitful economy, overall from a business perspective it makes it a very good outpost.”

Sonesta competes with luxury brand hotels, according to Alan X. Reay of Atlas Hospitality Group, a hotel consultancy. Reay described the brand as “slightly below” Ritz Carlton and Four Seasons and said the Milpitas hotel will compete against full-service Marriotts and Hiltons.

Reay said the biggest challenge Sonesta’s newest location faces is a lack of name recognition in the California market.

Hospitality Properties Trust, a publicly traded REIT that buys and leases out hotels to brands, owns the property. According to a Q2 2016 earnings report, HPT bought the property for $52 million, or $220,300 per room. The previous owner was San Francisco-based Fillmore Capital Partners, according to county records.

While the hotel is open for business now, Sonesta plans on a “reimagination” of the property — renovations of the guest rooms, meeting and public spaces, and restaurant are planned to begin within the next year. Flores said a contract for the renovations hasn’t been awarded yet, and that he couldn’t comment on whether the hotel would be open during any improvements.

Details the exact nature of the renovations were scarce, but Flores said the company wanted to incorporate “local elements” into hotel experience, and mentioned using local produce at the restaurant and native flora and fauna of the surrounding area. When asked if the company was looking to make the property more upscale, Flores said “I think that’s fair to say, from a technical … and marketing perspective.”

Reay said most other hotel brands would complete all renovations prior to announcing a brand change, and called Sonesta’s announcement prior to their renovations being done “unusual.”

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