Two hotel sites in North San Jose default on mortgages

0
Comfort Suites San Jose Airport Hotel at 1510 N. First Street (Google Maps, Getty)

A struggling lodging industry in the Bay Area suffered two losses for non-payment of mortgage.

The first, the Comfort Suites San Jose Airport hotel at 1510 North First Street, is facing foreclosure after a default notice late last month, the San Jose Mercury News reported.

In the second case, a South Korea-based investor who owns approved land for a lodge in North San Jose also received a notice of default.

The 56-room Comfort Suites, owned by subsidiaries run by Hansaben Patel and Bhavesh Patel, defaulted on a $5.4 million loan, county records show. Pacific Enterprise Bank provided the financing.

Its owners bought the hotel, perched along a streetcar line east of Mineta San Jose International Airport, in 2013 for $6.6 million. The Comfort Suites is operated by Maryland-based Choice Hotels.

Just before Comfort Suites defaulted on October 31, the second hotel site went bankrupt.

Mirae San Jose received a default notice Oct. 26 after failing to pay her mortgage on land in the Alviso neighborhood of North San Jose where she planned to build a 200-room hotel.

The South Korea-based business group paid $22.5 million for the 3.2-acre property in 2019 and then received city approval for the hotel. Mirae San Jose has never innovated.

Now the Alviso hotel project has stalled due to mortgage default. Pine Tree Specialized Private Investment Trust and KEB Hana Bank loaned $26.4 million to Mirae San Jose when it purchased the land.

Lenders in both defaults are asking for full repayment, plus late fees and interest, according to Mercury News. Without reimbursement, they intend to conduct separate foreclosure proceedings to seize ownership of the properties or auction off the real estate.

The 2020 coronavirus pandemic has hammered the hospitality and travel industries in the Bay Area and around the world, with business falling further after state and local governments imposed shutdowns to fight the contagion.

More than two years after the closures were imposed, experts say many Bay Area hotels are still suffering from below-average occupancy levels and room rates. These factors depressed sales of hotel properties.

— Dana Barthelemy

Share.

Comments are closed.