Westin San Jose, formerly Sainte Claire Hotel, goes up for sale

SAN JOSE — The Westin San Jose, a landmark downtown hotel also known as The Sainte Claire, is up for sale in a deal that could demonstrate the strength — or underscore the fragility — of the Bay Area lodging market in the wake of the coronavirus.

The 171-room Westin San Jose, which was built in 1926, is considered one of the architectural gems of the downtown district of the Bay Area’s largest city.

“This hotel deal is going to be a really good test as to the health of the hotel market, especially in downtown San Jose,” said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the California lodging market.

Just down the street, the Fairmont Hotel closed its doors in March, the same day it toppled into a Chapter 11 bankruptcy case to reorganize its finances. The bankruptcy proceeding is ongoing.

Eastdil Secured, a commercial real estate firm, is marketing Westin San Jose for sale.

“The offering presents a compelling opportunity to acquire a prominently located, full-service hotel in a leading gateway market that benefits from an efficient operating structure, superior Westin brand affiliation, and additional value-add opportunities,” Eastdil stated in the brochure.

Terms weren’t immediately available.

“This will be a good market indicator as to how deep or how shallow is the buyer pool for hotels that rely almost exclusively on business travelers and convention events,” Reay said. “People who are buying hotels today are expecting a very sharp V-shaped recovery for the hotel business.”

 

Westin San Jose hotel in downtown San Jose, located at 302 S. Market St. // Google Maps

In 2017, South Korea-based Aju Hotels and Resorts paid $64 million for the Westin San Jose, according to Santa Clara County property records. The seller was Wolff Urban Development, a firm controlled by developers Lew Wolff and Keith Wolff. Lew Wolff is a former co-owner of the Oakland A’s baseball club.

The Wolff-led group undertook a wide-ranging renovation of the hotel a few years before selling.

“Following a comprehensive $7.2 million repositioning in July 2015, Westin San Jose established itself as downtown San Jose’s premier full-service hotel and one of the city’s most recognized architectural landmarks,” Eastdil stated in its marketing brochure.

The Westin San Jose upgrade worked out to $42,000 per room, according to the Eastdil offering package.

The ultimate price that a buyer winds up paying for the hotel could furnish an important clue as to the true health of the Bay Area lodging market and how severely it was affected by the coronavirus.

The hotel’s performance suffered greatly during 2020, a year dominated by a collapse worldwide of the travel, hotel, and restaurant sector, and measured by weak occupancy levels and room rates.

During 2019, occupancy levels averaged 76.2% at the Westin San Jose, according to the Eastdil marketing package. But during 2020, occupancy plummeted to 36.2%. Eastdil says  occupancy levels are expected to average 47.3% in 2021, 69% in 2022, and 76.3% in 2023.


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