In January of this year, Han’s Holdings Group traded its 18-story, 35-room Hilton San Jose in the heart of Silicon Valley, CA reportedly to GEM RealtyCapital for roughly $117.5 million. The hotelwas located near multiple demand drivers,including the San Jose Performing ArtsCenter, San Jose State University, SAP Centerand Levi’s Stadium. With more than 10 million square feet of office space, the propertyis connected by a skybridge to the550,000-square-foot San Jose McEneryConvention Center.
The hotel is also close to many Fortune
1000 corporations, including some of the
most recognizable names in technology,
which was another appeal of the property.
But the major draw, according to JLL Hotels
and Hospitality, which worked on behalf of
the seller, was that hotel development oppor-
tunities in the area were very limited. The
hotel represented a rare opportunity for an
investor to acquire a high-profile full-service
property in the heart of Silicon Valley, JLL
EVP Mark Fraioli said at the time.
Then the coronavirus came. As of thiswriting, Hilton San Jose is closed to guests.Instead, the property is now representative ofa bygone era for hotels when investors soughtout well-located properties that boasted asolid RevPAR. It is hardly alone. As the coronavirus swept the US, hotels and the travelindustry were the first to suffer as peoplestopped moving from their homes.
As of April 8, nearly 8 out of 10 hotelrooms were empty across the country perSTR. Since the public health issue beganescalating in mid-February in the US, hotelshave already lost more than $10 billion inroom revenue, according to the AmericanHotels and Lodging Association.
These figures will only worsen as the USworks to bring the coronavirus under control. Hotels are currently on pace to losemore than $500 million in room revenue perday based on current and future reported
BY NATALIE DOLCE
BESIDES RETAIL,HOTELS HAVE BEENTHE HARDEST HITCOMMERCIAL REALESTATE SECTOR.
DESPITE ITS CURRENTDIFFICULTIES, THESECTOR IS CLINGINGTO ITS HISTORY OFRESILIENCY.
REVERSAL OF FORTUNE