The once renowned Fairmont San Jose may soon be split in two.
San Ramon-based Eagle Canyon Capital, led by Sam Hirbod, is listing the shorter of two towers that make up the renamed 805-room Signia by Hilton San Jose hotel at 170 South Market Street, the San Jose Mercury News reported. The price was not disclosed.
Hirbod is selling the 264-room south tower, a newer annex to the original main tower with 541 rooms.
If sold, the Signia by Hilton would operate solely in the north tower, now undergoing a total renovation. Guests at the Signia are being temporarily lodged in the south tower while crews complete the makeover.
“All of the amenities are in the north tower – restaurants, the lounge, swimming pool, fitness center, the conference center,” Hirbod told the Mercury News. “The renovation is about 90-percent finished.”
JLL is marketing the sale of the south tower. It’s possible the property, under a new owner, could serve as long-term residences.
Hirbod said interest is popping: while he expected 15 real estate tours looking at the tower, he booked 60 tours. “It looks like we will have north of 50 bidders,” Hirbod said.
“What is being looked at for the south tower that’s up for sale is more of a residence idea, longer-term stays, than a typical hotel,” Hirbod said. “People would stay for a month, 180 days, a year. It would be like a corporate apartment concept.”
“For long-term stays, there’s a shortage of that kind of facility in San Jose,” he said. “A lot of that business is going to Mountain View and Palo Alto.”
An approach that differs from a conventional big hotel could work in the south tower, Alan Reay, president of Irvine-based consultancy Atlas Hospitality Group, which tracks the lodging sector, told the newspaper.
“Long-term stays is a business model that held up even during the pandemic,” Reay said.
The former Fairmont fell into bankruptcy and closed its doors in March 2021, saying business shutdowns and travel restrictions from the coronavirus pandemic had ruined its bottom line.
An ownership group led by Hirbod used the bankruptcy to do more than reorganize the hotel’s crumbling finances. He also ousted hotel operator Accor Management and replaced it with Signia by Hilton.
During the pandemic, the Bay Area hotel market was ranked among the worst in the nation. Downtown San Jose is primarily a market for business travel and conventions, two sectors that were particularly hard hit by the pandemic.
The Signia by Hilton opened last April. An affiliate of BrightSpire Capital, the property’s principal lender, provided the hotel’s owner with a $185 million loan to shore up its financing.
— Dana Bartholomew
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