The hotel's downtown location at 300 Almaden Blvd. places it near multiple demand drivers.
SAN JOSE—The 18-story Hilton San Jose is connected by a skybridge to the 550,000-square-foot San Jose McEnery Convention Center. The hotel's downtown location at 300 Almaden Blvd. places it in the heart of Silicon Valley and near multiple demand drivers, including the San Jose Performing Arts Center, San Jose State University, SAP Center and Levi's Stadium, along with more than 10 million square feet of office space.
"Hilton San Jose is proximate to a plethora of Fortune 1000 corporations, including some of the most recognizable names in technology today," says John Strauss, JLL managing director. "Moreover, San Jose is in the midst of an urban renaissance with millions of square feet of new office space in the pipeline."
The 353-room hotel recently sold for $117.5 million. The Hilton sold unencumbered of an existing management agreement to an undisclosed buyer.
JLL Hotels and Hospitality closed the sale on behalf of the seller, Han's Holdings Group Ltd. Strauss and executive vice president Mark Fraioli led the JLL team on the transaction. Fraioli echoed the current appeal of San Jose for numerous reasons.
"To hear Adobe announce that their headquarters expansion would nearly double their headcount and to see Jay Paul get underway with the construction of their 875,000-square-foot tower at 200 Park Avenue simply underscores the vitality of this market and the fact that the transformation of San Jose is only beginning," Fraioli tells GlobeSt.com.
The hotel features 18,375 square feet of meeting and event space, an outdoor pool, 24-hour fitness center, business lounge, and a restaurant and bar.
"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," Fraioli adds. "This hotel represented a rare opportunity for an investor to acquire a high-profile full-service property in the heart of Silicon Valley."
Indeed, peak levels of new hotel rooms were evident last year with volume stabilizing thereafter. Due to labor shortages and rising costs that are plaguing the entire construction industry, high costs are leading to a forecast decline in new hotel supply in 2020, according to JLL's recent hotel report.
New US hotel projects are focusing on specialization to fit a particular location and target market. This can include much smaller room sizes, lobbies with integrated bars and restaurants, and more outdoor space, all of which impact the cost to build and type of materials needed for a project, says the report.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
