Home News San Jose hotel tumbles into loan default in fresh lodging delinquency

San Jose hotel tumbles into loan default in fresh lodging delinquency

by admin
0 comment

SAN JOSE — A San Jose hotel near a local tech hub defaulted on a loan, marking the second hotel property in the City of South Bay to face foreclosure for delinquent loans.

A new bout of mortgage defaults suggests the economic fallout of the coronavirus outbreak may still be plaguing parts of the Bay Area’s battered lodging industry.

The 56-room Comfort Suites San Jose Airport Hotel at 1510 N. First Street faces foreclosure after the property’s investors filed default notices with the Santa Clara County Records Department on Oct. 31.

County records show the defaulted loans totaled $5.4 million.

Pacific Enterprise Bank provided the financing, according to loan documents filed with the county in March 2021.

According to the hotel’s website, Comfort Suites Hotel is part of the Choice Hotels chain.

The group, which owns hotel properties through multiple affiliates, is headed by Hansaben Patel and Babesh Patel, whose primary business is in the lodging and real estate industry, according to county and state business records.

The current owner purchased the hotel in 2013 for $6.6 million and is located on the light rail line.

The Comfort Suites loan default is the second time in days that the San Jose hotel has defaulted on its mortgage.

On October 26, a loan default notice was filed against a real estate company that owns land in the Alviso neighborhood of north San Jose where a proposed 200-room hotel is located.

Alviso’s land in arrears totals 3.2 acres and is for a proposed hotel development, according to county and city public records.

South Korea-based business group Mirae San Jose paid $22.5 million for Alviso’s land in 2019, purchasing 3.2 acres of land for a hotel site, according to public county files.

San Jose city officials approved the hotel in 2019, but Mille San Jose never started development.

The Alviso hotel project is currently in limbo as a result of uncertainty stemming from a mortgage default. Pine Tree Specialized Private Investment Trust and KEB Hana Bank provided Mirae San Jose with his $26.4 million loan for the land purchase.

In the event of default on both loans, each lender is seeking full repayment of the original loan along with late fees and interest.

You may also like