San Jose State University may occupy part of a Hilton hotel in Downtown San Jose for student housing in a potential sale now in negotiations by its owner.
SJSU is working on a deal with San Ramon-based Eagle Canyon Capital for a purchase of the shorter of two towers of the 805-room Signia by Hilton San Jose hotel at 170 South Market Street, the San Jose Mercury News reported, citing unidentified sources.
A price for a potential sale was not disclosed. It wasn’t clear if the buyer would be the university, a public agency or a private firm.
“The university is always exploring options to increase the availability of housing for its students, staff and faculty,” Charlie Faas, San Jose State’s vice president for administration and finance, told the Mercury News. “No transactions have been finalized.”
Eagle Canyon, led by Sam Hirbod, has listed the 264-room south tower, an annex to the 541-room main tower at the former Fairmont San Jose.
If sold, the Signia by Hilton would operate in the north tower, now undergoing a renovation. The university would take up the curving, 13-story south tower, according to the sources.
They said that, given a deal, the high-rise would be converted to San Jose State student housing. Its ground floor now contains a cafe and a Morton’s steakhouse.
“Getting more San Jose State students living Downtown has shown to be a huge benefit economically and this would continue that trend,” Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy, told the Mercury News.
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. It ousted hotel operator Accor Management and replaced it with Signia by Hilton.
And it spent $65 million to “reposition the hotel,” Hirbod said, which reopened in April last year.
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.
Hirbod believes the hotel would function better if it were smaller, with the north tower being able to accommodate all its guests. The main tower also has restaurants, a lounge, pool, fitness center, cabana and a large conference center suitable for a full-service hotel.
— Dana Bartholomew
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