A downtown San Jose hotel that’s been vacant since March is getting a second chance.
The 805-room Fairmont San Jose, which shuttered after filing for bankruptcy, was rebranded in August once it emerged from bankruptcy as Signia Hilton San Jose, the Mercury News reported. BrightSpire Capital, the principal lender for the property,
said in a Nov. 3 filing with the Securities and Exchange Commission that it could reopen as soon as early 2022.
The principal owner of the property, a group led by real estate investor Sam Hirbod, was able to recover from the bankruptcy quickly, according to BrightSpire executives. The group continued to pump money into the property throughout the proceedings.
“We applaud the borrower’s efforts to keep funding the property, which is the reason why we stuck by that borrower,” Michael Mazzei, CEO of BrightSpire, said during a Nov. 3 conference call. He also said the company didn’t charge the group with any default interest, as that was the lender’s stance during the pandemic.
A federal judge ended the bankruptcy proceedings in August by approving a plan to reorganize the property’s finances.
The hotel is under new management because the owner terminated a contract with Accor Management U.S. shortly after filing for bankruptcy. The owner reached a settlement agreement with Accor in light of a judge’s estimate that it could have lost as much as $22.2 million because of the cancelation.
Management will be handled by Signia Hilton, which agreed to provide $15 million to bolster the property’s finances. JPMorgan Chase is also providing a separate $25 million loan.
“We have the right brand and the right team,” Hirbod told the Mercury News in August. “We are incredibly confident in Hilton’s approach to hospitality, their understanding of this asset, and their marketplace knowledge.”
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