The family that owns Bay 101 casino in north San Jose is selling two sites near their property that have city approval for about 470 hotel rooms.
The owner, a group led by the Bumb family, listed the properties at 1770 N. First Street, off the junction of U.S. Highway 101 and East Brokaw Road, the Mercury News reported. They’re selling for a combined $30.5 million.
One is 2.9 acres and has approval and a franchise agreement in place for a four-story 171-room Home2 Suites by Hilton and is asking $18 million. The other 2.2-acre site would allow for a 10-story hotel building of about 300 bedrooms or an assisted living facility and is asking $12.5 million.
“The family just decided they didn’t want to be in the hotel business,” Ralph Borelli, whose Borelli Investment is selling the property, told the Mercury News.
Both sites are located in an opportunity zone, meaning in areas that offer tax benefit opportunities for whoever develops them.
The Bay Area’s tourism industry was ravaged by the pandemic, leading to a significant dropoff in hotel activity. Room rates sank by almost 60 percent to an average of $92 a night, a record drop for revenue per available room, according to CoStar data from last year. Bay Area occupancy was also tied with Oahu, Hawaii for the steepest decline since October 2019.
While investors spent a record $10 billion on hotels across California last year, the Bay Area was the only sizable market in which the number of deals fell. Six hotels sold in San Francisco last year, compared with nine in 2020. The median price was $84.8 million, far above $15.7 million the prior year.
[Mercury News] — Gabriel Poblete
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