News
Major effort begins to shore up finances of historic San Jose hotel tower
Hotel Signia by Hilton at 170 South Market Street in downtown San Jose, 2022.
SAN JOSE — One of the loans on a historic hotel tower in downtown San José is up for sale, but sweeping efforts are underway to inject new money into the lodging hub to improve its financial picture.
Commercial real estate firm JLL is seeking a buyer for one of its loans for the Signia by Hilton hotel, one of downtown San Jose’s most iconic hotels and a key driver in the quest to help the city’s urban core recover from the coronavirus.
A marketing brochure that JLL is circulating says the loan that is for sale is “delinquent,” which could mean that Brightspire Capital, the hotel’s lender, has not received all of the payments owed to the hotel.
The hotel tower could soon have a very different and improved financial structure, according to sources familiar with the South Bay commercial real estate market.
New financing is being arranged to recapitalize the hotel’s finances and put the property on solid monetary footing, according to the sources, who asked not to be identified because they are not authorized to discuss the situation on the record.
The Signia by Hilton hotel, at 170 South Market Street, has 541 rooms and is a mainstay of the Silicon Valley lodging market.
The hotel’s ownership group declined to comment on the situation.
The purpose of the recapitalization is to find a new lender and financing package for the hotel property.
The hotel’s current financing package totals about $165.3 million, consisting of a $136 million primary loan and a $29.3 million secondary loan that is being floated for sale, according to JLL marketing materials.
In November 2023, the hotel’s former south tower, with 264 units, was purchased by a Bay Area real estate company that is in the final stages of a project to convert the facility into student housing for San Jose State University.
Mill Valley-based Throckmorton Partners, acting through an affiliate, paid $73.1 million to purchase the south tower. That purchase price is part of an overall $113 million package that includes extensive upgrades and construction efforts to convert the tower into SJSU residences before this year’s fall semester.
In recent years, the north tower has undergone dramatic renovations. In 2022, the legendary Hilton chain began managing and operating the hotel.
“The property underwent extensive renovations from 2021 to 2024 and a conversion to a globally recognized luxury hotel brand in April 2022,” JLL’s marketing brochure said.
The renovation includes all guest rooms, the lobby, common areas and the addition of new dining options.
“The property benefits from numerous amenities, including a state-of-the-art fitness center, 37,076 square feet of meeting space and a sprawling rooftop pool with skyline views,” the JLL brochure states.
The hotel is also considered to be in an excellent location in downtown San Jose.
“The property is poised to benefit from the strong lodging fundamentals in the San Jose-Santa Cruz market,” the JLL brochure stated.