SAN JOSE — Two prime hotel development sites are being put up for sale in north San Jose next to the busy Bay 101 casino, a real estate executive said Thursday.
The properties are being offered by the landowner, a group headed up by the Bumb family, which also owns the adjacent gambling complex. Borelli Investment Co. executives Ralph Borelli and Chris Anderson are leading the efforts to sell the site.
“The family just decided they didn’t want to be in the hotel business,” said Borelli, chairman of San Jose-based Borelli Investment Co., a real estate firm.
The development-ready hotel pads have an address of 1770 N. First St. and are located near the interchange of US Highway 101 and East Brokaw Road.
The two development sites have been approved by the city for a combined total of as many as 470 hotel rooms, according to a marketing brochure prepared by Borelli Investment.
“The properties are in an opportunity zone,” Borelli said.
Opportunity zones can offer tax advantages to real state developers and investors who significantly redevelop properties in certain areas, including downtown San Jose, other parts of San Jose and downtown Oakland, as well as numerous other cities and neighborhoods nationwide.
One hotel development pad totals 2.9 acres and is fully approved for a 171-room Home2 Suites by Hilton, the flyer stated.
The other project site totals 2.2 acres and is designed for a 10-story hotel that could contain roughly 300 rooms. An alternative development proposal for the site could allow an assisted-living complex on the second property.
The Home2 Suites by Hilton project property is being offered for $18 million. The hotel would be four stories. The Bumb family has obtained a franchise agreement whereby Home2 Suites by Hilton would become the hotel operator.
The second development site where a hotel or assisted living center could rise is on the market for $12.5 million.
The hotel market worldwide and in the Bay Area collapsed with the onset of government-mandated business shutdowns to help curb the spread of the coronavirus.
Despite an array of coronavirus-linked uncertainties, some hotel development has resumed in sections of the Bay Area.
A number of hotels have just opened or are slated to open in Santa Clara County.
Plus, investors still hunger to buy hotels in world-class destinations and resort areas such as Big Sur and the North Bay Wine Country. In many instances, investors are paying record prices for hotels in these local getaway places.
Even after the purchase of the hotel sites in north San Jose, if a sale were to occur, the development of either property isn’t likely to begin right away.
Final construction drawings and a building permit are required before any development can begin.
“You probably couldn’t break ground for a year after the building permit is issued and then it takes a year to build the hotel,” Borelli said.