Hotel development sites in prime San Jose location are up for sale
SAN JOSE — Two prime hotel development sites are up for sale in North San Jose next to the busy Bay 101 casino, a property manager said Thursday.
The properties are offered by the landowner, a group led by the Bumb family, who also own the adjacent gambling complex. Borelli Investment Co. executives Ralph Borelli and Chris Anderson are leading efforts to sell the site.
“The family just decided they didn’t want to be in the hospitality business,” said Borelli, president of Borelli Investment Co., a San Jose-based real estate company.
The development-ready resorts have an address at 1770 N. First St. and are located near the interchange of US Highway 101 and East Brokaw Road.
The two development sites have been approved by the city for a combined total of 470 hotel rooms, according to a marketing brochure prepared by Borelli Investment.
“Properties are in an opportunity zone,” Borelli said.
Opportunity Zones can provide tax benefits to real estate developers and investors who significantly redevelop properties in certain areas, including Downtown San Jose, other parts of San Jose, and Downtown San Jose. Oakland, as well as many other cities and neighborhoods nationwide.
A hotel development area totals 2.9 acres and is fully approved for a 171-room Home2 Suites by Hilton, the flyer says.
The other project site covers 2.2 acres and is designed for a 10-story hotel that can hold approximately 300 rooms. An alternative development proposal for the site could allow for an assisted living complex on the second property.
Ownership of the Home2 Suites by Hilton project is on offer for $18 million. The hotel would have four floors. The Bumb family secured a franchise agreement whereby Home2 Suites by Hilton would become the hotel operator.
The second development site where a hotel or assisted living facility could develop is on the market for $12.5 million.
The hotel market around the world and in the Bay Area has collapsed with the start of government-mandated business closures to help curb the spread of the coronavirus. But despite a series of coronavirus-related uncertainties, some hotel developments have resumed in parts of the Bay Area. A number of hotels have just opened or are about to open in Santa Clara County, including Signia by Hilton at former Fairmont site in downtown San Jose.
Additionally, investors are still eager to buy hotels in world-class destinations and resort areas such as Big Sur and the North Bay wine country. In many cases, investors are now paying record prices for hotels in these local getaway spots.
Even after the hotel sites in North San Jose are purchased, should a sale occur, development of either property is not expected to begin immediately.
Final building plans and a building permit are required before any development can begin.
“You probably couldn’t innovate for a year after the building permit was issued,” Borelli said, “and then it takes a year to build the hotel.”