Hotel owner Ajay Shingal faces a financial pickle — a $22 million mortgage set to mature on a 206-room hotel in San Jose that in a decade has lost two thirds of its value.
His locally based 360 Global Venture Group, owner of the Wyndham Garden Valley San Jose Silicon Valley hotel at 399 Silicon Valley Boulevard, must pay off the loan next month, the Silicon Valley Business Journal reported.
In 2014, UBS AG provided Shingal’s limited liability company with a $22 million commercial mortgage-backed securities loan tied to the property. The distressed loan, in special servicing since June 2020, is set to mature in October.
A decade ago, the three-story hotel was valued at $46.5 million. In November, the only four-star Wyndham hotel in San Jose was valued at $16.1 million — 65 percent less.
It’s unclear how Shingal will address the looming maturity date. He didn’t respond to a request for comment from the Business Journal.
The steep decline in value raises the chance the owner could decide to forfeit the property rather than continue payments on the loan, of which the principal is worth more than the hotel.
That strategy has been pursued by large commercial property owners across the Bay Area as low-interest loans come due — as was the case for owners of the region’s largest hotels, the Hilton San Francisco Union Square and Parc 55 in Downtown San Francisco, which saw their value drop $1 billion in eight years. A judge has extended their sale deadline.
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Miami-based LNR Partners is the special servicer of the Wyndham Garden Valley San Jose Silicon Valley, the “only Wyndham four-star hotel in San Jose,” according to a recent loan report prepared for bondholders.
The 115,000-square-foot hotel, built in 1990 and renovated in 2013, was the Four Points by Sheraton before switching to Wyndham in 2016. It’s just off Highway 101 and 10 miles from Downtown San Jose and 13 miles from the city’s international airport, according to Travel Weekly.
— Dana Bartholomew