175-room hotel proposed near San Jose’s airport
Marriott would be located near a new mixed-use development
SAN JOSE >> A Marriott hotel could rise near Mineta San Jose International Airport under a proposal being floated by the developers of the Coleman Highline office complex.
The proposed hotel would contain 175 rooms, rise five stories and total 120,000 square feet, according to documents on file with San Jose planners.
The Coleman Highline development, located on Coleman Avenue and adjacent to Avaya Stadium and the San Jose airport, could eventually contain 1.5 million square feet of office development along with ground-floor retail spaces.
The project, which is being developed by Hunter Properties, would also include two hotels.
The five-story hotel that's now under review by city planners would be the first of the two lodging places in the development.
“The hotel will be a Marriott brand,” said Curtis Leigh, a principal executive with Hunter Properties. He didn't specify which of the Marriott brands would be connected to the new hotel.
Hunter is in the early planning stages with San Jose city officials, so the timing of the hotel isn't precise at this point.
The hotel would be located at the southeast end of the development, next to Avaya Stadium and near a building that's been leased to 8×8, a fast-growing cloud communications and software firm.
8×8 leased 162,000 square feet at Coleman Highline in a January deal. Potentially 650 to 800 of the company's workers could move into the offices.
“We plan to sell the site for the new hotel to the hotel operator,” Leigh said. “They seem to like this market.”
The timing for a new hotel could be propitious, based on current occupancy trends for lodging places, both in the area and in Silicon Valley generally.
“The numbers for hotels in the airport area are pretty good,” said Bobby Bowers, a senior vice president with STR, which tracks the lodging market. “The average daily rates and the occupancy rates are strong.”
In 2017, average room rates in the airport area were $171.58, up 3.4 percent from 2016. The 2016 rates were 8 percent higher than 2015, according to STR.
The hotel market in Santa Clara County and the Peninsula area south of San Francisco is also getting more robust, according to CBRE Hotels, a commercial real estate consultancy.
Revenue per available room, a widely used benchmark for the hotel market, was $181.98 during March in the Silicon Valley area, which was a 5.4 percent increase from the same month the year before, CBRE Hotels determined. Hotel occupancy rates were 81.8 percent in March, up from 81.4 percent the same month the year earlier, CBRE reported.
“The supply and demand balance is pretty favorable for operators in the airport area,” Bowers said. “Things look good if the market adds more hotel rooms.”
Plus, big-time expansions in Silicon Valley by major tech companies such as Mountain View-based Google, Cupertino-based Apple, Menlo Park-based Facebook and Seattle-based Amazon have set the stage for big-time increases in employment in the region. The upswing in hiring tends to bode well for demand for retail outlets, restaurants and hotels.
“The tenants in the development and the other companies in the area can be a captive market for the hotel,” Leigh said.