The Westin San Jose, formerly Sainte Claire Hotel, goes on sale
SAN JOSE – The Westin San Jose, a historic downtown hotel also known as St. Clair, is on sale in a deal that could demonstrate the strength – or underscore the fragility – of the market in the accommodation in the Bay Area following the coronavirus.
The 171-room Westin San Jose, built in 1926, is considered one of the architectural gems of the Downtown District of the Bay Area’s largest city.
“This hotel offering is going to be a very good test for the health of the hotel market, especially in downtown San Jose,” said Alan Reay, president of the Irvine-based Atlas Hospitality Group, which monitors the market from accommodation in California.
Just down the street, the Fairmont hotel closed in March, the same day it slipped into a Chapter 11 bankruptcy case to reorganize its finances. Bankruptcy proceedings are ongoing.
Eastdil Secured, a commercial real estate company, markets the Westin San Jose for sale.
“The offering presents a flawless opportunity to acquire a prominent full-service hotel in a leading gateway market that benefits from an efficient operational structure, superior Westin brand affiliation and ‘additional value-added opportunities,’ Eastdil said in the brochure.
The conditions were not immediately available.
“This will be a good indicator of the market as to how deep or shallow the pool of buyers is for hotels that rely almost exclusively on business travelers and convention events,” Reay said. “People who buy hotels today expect a very distinct V-shaped recovery for the hospitality industry.”
In 2017, South Korea-based Aju Hotels and Resorts paid $ 64 million for the Westin San Jose, according to Santa Clara County property records. The seller was Wolff Urban Development, a company controlled by developers Lew Wolff and Keith Wolff. Lew Wolff is a former co-owner of Oakland A.
The Wolff-led group undertook a major renovation of the hotel a few years before selling it.
“After a complete repositioning of $ 7.2 million in July 2015, the Westin San Jose established itself as the first full-service hotel in downtown San Jose and one of the most recognized architectural landmarks in the area. city, ”Eastdil said in its marketing brochure.
The Westin San Jose upgrade was $ 42,000 per room, according to Eastdil’s offer.
The ultimate price a buyer ends up paying for the hotel could provide an important clue about the true health of the Bay Area accommodation market and how badly it has been affected by the coronavirus.
The hotel’s performance suffered greatly in 2020, a year dominated by a global collapse in the travel, hotel and restaurant industry, and measured by low occupancy and room rates.
In 2019, occupancy levels were on average 76.2% at the Westin San Jose, according to Eastdil’s marketing package. But in 2020, the occupancy rate dropped to 36.2%. Eastdil says occupancy levels are expected to average 47.3% in 2021, 69% in 2022 and 76.3% in 2023.
Other accommodation experts have predicted that the Silicon Valley hotel sector will recover faster than its counterparts in Oakland and San Francisco, although a full recovery is not expected in the South Bay. before 2023.
“San Francisco, San Jose, Anaheim and downtown Los Angeles are among the hardest hit parts of the hospitality industry right now,” Reay said. “But buyers are currently lining up to buy these hotels.”
A new Westin San Jose owner is poised to reap a massive performance boost, especially with major projects underway and in the works, including Google’s transit village near Diridon station, in the opinion Eastdil brokers who market iconic accommodation.
“The hotel is strategically located in downtown San Jose, in the heart of the city’s renaissance, driven by Google, transit, technology and residential developments,” the marketing brochure states.