Korean firm buys site for big hotel in new north San Jose entertainment district

SAN JOSE — A South Korean hotel operator has taken a
significant step in its push to open a big new hotel in north San
Jose by purchasing the land it needs to build the new lodging,
which would be part of an entertainment district that’s planned
for the area.

Shilla Stay is eyeing a hotel at a site in the vicinity of 4701
N. First St. in San Jose, according to city planning documents.

Milpitas-based Terra Development, the owner of 40 acres where an
“entertainment district” is expected to sprout in north San
Jose’s Alviso area, has sold some of its property for the hotel
site, Santa Clara County property records show.

“Terra still owns the Topgolf site,” Jag Kapoor, president
of Terra Development, said in an email to this news organization.
“We have only sold a 3-acre hotel parcel to Shilla Group.”

The buyer, operating with the name Mirae San Jose, paid $22.5
million for the hotel site, according to county public documents
that were filed on July 29. The buyer also obtained a loan of $26.4
million from South Korea-based KEB Hana Bank, the property records
show.

The hotel is expected to be 200 rooms, Kapoor said. The time
frame for the hotel’s construction wasn’t immediately
known.

Topgolf operates high-tech driving ranges that allow people to
hit golf balls equipped with microchips that record distance and
accuracy. The venues typically also include dining and drinking
establishments.

Alan Reay, president of Irvine-based Atlas Hospitality Group,
which tracks the California lodging market, has visited the Topgolf
complex in Las Vegas and came away impressed by his visit.

“The venue is amazing, it’s phenomenal,” Reay said. “I
think Topgolf will do really well there, with all the tech
companies and tech employees in the area.”

The Shilla Stay hotel could also do well, in Reay’s view. But
that’s not necessarily because the Topgolf operation will drive
visitors to the adjacent hotel. Rather, the hotel’s location in
Silicon Valley, home to a red-hot job market and tech boom, could
underpin the facility’s success.

“People with business connected to Google, Apple, Facebook
could drive demand for the new hotel,” Reay said.

The 40-acre entertainment district being crafted by Terra
Development fronts on North First Street, lies between Nortech
Parkway and Gold Street, and is perched on the banks of the
Guadalupe River in the Alviso community.

“We are under construction and will be opening in San Jose
next year,” said Morgan Schaaf, a spokeswoman for Dallas-based
Topgolf. “We can’t wait.”

 

Source: FS – All – Real Estate News 1
Korean firm buys site for big hotel in new north San Jose entertainment district