A battered Bay Area lodging industry has suffered two casualties for failure to pay the mortgage.
The first, the Comfort Suites San Jose Airport hotel at 1510 North First Street, faces foreclosure after a notice of loan default late last month, the San Jose Mercury News reported.
In the second instance, a South Korea-based investor that owns land approved for a lodge in North San Jose also received a loan default notice.
The 56-room Comfort Suites, owned by affiliates led by Hansaben Patel and Bhavesh Patel, defaulted on a $5.4 million loan, county records show. Pacific Enterprise Bank provided the financing.
Its owners bought the hotel, perched along a light rail line east of Mineta San Jose International Airport, in 2013 for $6.6 million. The Comfort Suites is operated by Maryland-based Choice Hotels.
Just before the Oct. 31 Comfort Suites default, the second hotel site fell into delinquency.
Mirae San Jose received a notice of loan default on Oct. 26 after failing to pay its mortgage on land in north San Jose’s Alviso district where it planned to build a 200-room hotel.
The South Korea-based business group paid $22.5 million for the 3.2-acre property in 2019, then received city approval for the hotel. Mirae San Jose never broke ground.
Now the Alviso hotel project is stalled because of the mortgage default. Pine Tree Specialized Private Investment Trust and KEB Hana Bank loaned $26.4 million to Mirae San Jose when it bought the land.
The lenders in both loan defaults seek full repayment, along with late fees and interest, according to the Mercury News. Without repayment, they intend to conduct separate foreclosure proceedings to seize ownership of the properties, or to auction off the real estate.
The coronavirus pandemic in 2020 hammered hotel and travel industries in the Bay Area and worldwide, with business tumbling further after state and local governments imposed shutdowns to combat the contagion.
More than two years after these shutdowns were imposed, experts say that many Bay Area hotels still suffer from subpar occupancy levels and room rates. Those factors have depressed the sales of hotel properties.
— Dana Bartholomew
Read more
Commercial
San Francisco
Downtown San Jose’s Hotel De Anza put up for sale
Commercial
San Francisco
KT Urban envisions boutique hotel for Santana Row