Urban Catalyst lands $48M construction loan for San Jose hotel
176-room hospitality property will open near Google’s Downtown West transit village
Urban Catalyst has snagged a $48 million construction loan for a 176-room hotel in Downtown San Jose.
The San Jose-based developer secured the loan to build Keystone, a Marriott TowneSuites Hotel, now under construction at 491, 493 and 497 West San Carlos Street and 270 Josefa Street, the San Jose Mercury News reported.
The eight-story hotel at San Carlos and Josefa streets is near Downtown West, Google’s proposed transit village near the Diridon train station, and not far from SAP Center.
Poppy Bank, based in Santa Rosa, provided the $48 million in construction financing for the project.
“The Keystone project is a bellwether for the development future of downtown San Jose,” Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy, told the Mercury News. “Obtaining financing for a hospitality project shows the investment and banking community’s faith in Urban Catalyst and Downtown San Jose.”
The site for the all-suites hotel lies in an opportunity zone, which enables real estate investors to obtain favorable tax benefits when they substantially redevelop a property. Ahead of breaking ground, Urban Catalyst raised a significant amount of opportunity zone funding from investors.
The overall project cost is $100 million, said Erik Hayden, founder and managing partner with Urban Catalyst. Typically, the cost would include the construction loan, equity investments, property purchase, building materials, labor and other expenses and fees.
The Cape Cod-style blue, white and brown hotel, designed by BDE Architects, will include a rooftop lounge and bar.
“Downtown San Jose is really the only true urban environment in Silicon Valley,” Hayden told the newspaper. “It’s the most logical place for infill development.”
Google’s 80-acre transit village is being cleared for construction. When finished, Downtown West will include up to 5,900 homes, 7.3 million square feet of offices, 500,000 square feet of shops and restaurants, a community center and 15 acres of parks.
The search giant expects to employ up to 25,000 people in the new neighborhood.
“Hotels, especially extended stay hotels, are expected to do very well,” Hayden said, “And we are also just 300 yards away from the Google village.”
Urban Catalyst has numerous projects in the works for Downtown, including Icon Echo Towers, a pair of 268-tall highrises with 415 apartments and 525,000 square feet of office space at 147 East Santa Clara Street. The developer of the 1.4-million-square-foot project seeks $600 million in financing.
— Dana Bartholomew