Sol San Jose assumes $26.4M loan for delinquent hotel project

Sol San Jose Owner has picked up a $26.4 million loan for a delinquent hotel project in North San Jose and is poised to take control of the approved development.

The South Korea-based investor acquired the loan to the real estate firm that proposed the 200-room hotel at 7 Topgolf Drive in the Alviso district, the San Jose Mercury News reported.

The loan to South Korea-based hotel planner Mirae-San Jose is in default – and Pine Tree Specialized Private Investment Trust and KEB Hana Bank had begun to foreclose on the loan with a scheduled trustee’s sale to publicly auction off the property or seize the land.

Mirae-San Jose bought the 3.2-acre property in 2019, paying $22.5 million, according to SFRegistry. That year, it won approval for the hotel project, which stalled during the pandemic.

The project, to include a 15,400-square-foot retail building, was eyed for development by Shilla Stay, an affiliate of Samsung Group, who had proposed the four-story hotel.

The boomerang-shaped site, north of Highway 237 and the Guadalupe River, sits next to the Topgolf San Jose driving range.

Sol San Jose, based in Seoul, took ownership of the mortgage and is in a position to foreclose the loan and become owner of the hotel development site.

A similar takeover took place at the historic Huntington Hotel in San Francisco, when Highgate and Flynn Properties cut a deal with lender Deutsche Bank to obtain ownership of a delinquent $56.2 million loan to Woodridge Capital. 

The new loan holders then foreclosed on the delinquent mortgage last month and took possession of the 12-story hotel on Nob Hill.

New owners of the San Jose hotel project would benefit from Topgolf, which opened in 2021.

Topgolf has been a steady draw as an entertainment, sports and dining center, according to the Mercury News.

The Dallas-based firm operates high-tech driving ranges that allow people to hit golf balls equipped with microchips that record distance and accuracy. The golf complexes typically offer watering holes and dining.

In 2015, Mirae Asset Global Investments bought the Fairmont Hotel in San Francisco for $450 million, or about $760,000 per room.

— Dana Bartholomew