SAN JOSE — One of downtown San Jose’s iconic properties is up for sale, a real estate business that could provide clues to the strength — or weakness — of the area’s economy.
Hotel De Anza is offered for sale at an unknown price, according to a marketing brochure and sales brief obtained by this news agency.
“This is a rare opportunity to acquire a historic, operationally flexible asset with considerable growth potential,” the sales brochure states.
Newmark, a commercial real estate company, leads the sales effort through the company’s Accommodation Capital Markets Group, which is based in the New York City borough of Manhattan.
Sellers are seeking up to $30 million for the 100-room hotel, which equates to around $300,000 per room, according to people with direct knowledge of the offer.
It was not immediately clear what the reception from potential buyers might be of this advertised price.
In 2015, the current owner, a subsidiary controlled by Los Angeles-based real estate firm Lowe Enterprises, bought the hotel for $20.4 million, according to a real estate database. As of mid-2022, the hotel’s property value was $22.5 million, according to documents filed with the Santa Clara County Assessor’s Office.
According to the business brochure, the hotel’s last major upgrade was in 2015.
“The San Jose market continues to experience new tailwinds for development and substantial growth driven by the growing presence of the world’s leading technology companies,” the marketing materials state.
A few blocks west is the footprint of a mixed-use neighborhood proposed by Google, where the search giant could employ up to 25,000 people. Google aims to develop office buildings, homes, shops, restaurants, hotel facilities and entertainment hubs near Diridon Station and the SAP Center.
Just down the street from the hotel, Adobe has completed construction of a new office skyscraper on West San Fernando Street that will significantly increase the size of its existing three-building headquarters.
Currently, Adobe employs approximately 3,800 people in downtown San Jose. The new skyscraper will accommodate about 3,000 people, according to Adobe. The North Tower expansion will increase the downtown workforce to 6,800 people, an increase of approximately 79% in the number of employees in San Jose’s urban core.
The 10-story Hotel De Anza, which opened nine decades ago during the Great Depression, was added to the National Register of Historic Places in 1982 and is one of the few Zig Zag Modern, or art deco buildings , in San Jose.
“This iconic art deco property is currently positioned as the only boutique lifestyle asset on the market,” Newmark said in its marketing brochure.
However, Hotel De Anza comes up for sale at a time when there are many uncertainties in the accommodation and travel sectors due to the economic blows caused by the coronavirus.
“We just went through a two-and-a-half-year plague and you couldn’t choose a worse real estate asset class than hotels,” said Mark Ritchie, president of Ritchie Commercial, a real estate company. “But the value of hotels can only go up.”
While some industries have rebounded well from the coronavirus outbreak, the hospitality and travel industries continue to struggle.
“Hospitality is going to take a little longer to get closer to what it was before the pandemic,” said Bob Staedler, chief executive of Silicon Valley Synergy, a land use and planning consultancy.
The economic effects of the coronavirus have hampered markets such as downtown San Jose and San Francisco, which rely heavily on business travel and conventions.
Still, Hotel De Anza could be set to enjoy a rebound under property law, property experts say.
“It’s a beautiful building and well placed,” Staedler said. “It will be a great buy for anyone wanting a long term asset.”
Around 1929, architect HH Weeks designed a 144-room hotel that was built on the site by legendary construction manager Carl Swenson. The hotel opened in 1931, and from the 1930s through the 1960s Hotel De Anza was considered one of the most popular places in the Bay Area and a fun place to see and be seen. .
In the 1970s, however, Hotel De Anza fell into disrepair, and it took the now-defunct San Jose Redevelopment Agency to save the tower from the wrecking ball by leading the reconstruction of the building. In 1989, the city commissioned Barry Swenson, grandson of Carl Swenson, to renovate the hotel.
“The hotel had a solid life in the past and it will have a solid life in the future,” Ritchie said. “It’s a beautiful property. »