Lenders seize San Jose site approved for hotel after loan default

Lenders on a site approved for a 132-room hotel in San Jose have seized the property through foreclosure.

LBC Capital Income Fund, based in Los Angeles, and the Fogel Family Trust took ownership of the 0.9-acre property at 1510 South De Anza Boulevard after a foreclosure on a $4.6 million loan to North Star Hotel Development, the San Jose Mercury News reported.

North Star bought the lot with a 7,000-square-foot commercial building at South De Anza and Sharon Drive in 2019 for $6.5 million. Two years later, the San Jose-based developer took out the $4.6 million loan tied to the property.

The unpaid debt had climbed to $5 million when the foreclosure proceeding was completed, according to a trustee’s deed filed to mark its completion.

The foreclosure comes after several similar losses to developers of hotels planned before the pandemic in San Jose.

In May, South Korea-based Pine Tree Investment & Management seized a 3.2-acre site of a proposed 200-room hotel at 7 Topgolf Drive in the Alviso District. 

In July, a San Leandro-based affiliate led by a gas station executive paid $4 million for the site of a proposed 11-story, 175-room hotel at 2850 Stevens Creek Boulevard after its owner faced foreclosure.

— Dana Bartholomew

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