Bankrupt San Jose hotel bought; revamp and rebranding are ahead

Southern California real estate alliance pays $38.6 million for Four Points by Sheraton

SAN JOSE >> A real estate alliance has officially bought a bankrupt San Jose hotel and is seeking to rebrand it as a Courtyard by Marriott following a revamp of the lodging.

Four Points by Sheraton, a 196-room hotel at 1471 N. Fourth St. in north San Jose, was bought by an alliance of Santa Monica-based Beachpoint Capital Management and Pasadena-based ASAP Holdings, according to public records.

The new owners paid $38.6 million for the San Jose hotel property, according to documents filed on June 7 with the Santa Clara County Recorder’s Office.

Beachpoint Capital, an investment management firm, and ASAP Holdings, which owns and manages hotels, resorts and other properties, are planning a wide-ranging upgrade and revamp of the north San Jose hotel.

“We were drawn to the hotel’s great location in Silicon Valley,” said Frank Yuan, chief executive officer with ASAP. “This is a top market.”

The new owners also are planning to undertake a rebranding of the hotel as a Courtyard by Marriott, according to Yuan.

“Marriot is on board with the rebranding,” Yuan said.

The 196-room San Jose hotel is slated to undergo a significant upgrade.

“We are going to completely renovate the hotel so it can be a Courtyard by Marriott,” Yuan said. “This is going to be a very large investment.”

The hotel landed on the auction block due to the bankruptcy of its previous owner, Singapore-based Eagle Hospitality Trust. Eagle Hospitality had been seeking to auction off its entire hotel portfolio for the last several months.

Beachpoint won the auction for the north San Jose hotel by placing a bid of $41.4 million, U.S. Bankruptcy Court records show.

“We were able to find a good opportunity to buy the hotel through the auction process,” Yuan said.

The difference in the prices is that the $38.6 million property purchase amount represents the value of the hotel structure and the land beneath it. The additional $2.8 million that brought the total bid to $41.4 million represents fixtures, equipment, personal property and other items in the hotel.

Yuan said that the majority of the financial backing for the hotel purchase was provided by Beachpoint Capital.

ASAP owns numerous hotels around the United States, according to the company’s website.

“Our company has been acquiring hotels over the last seven to eight years,” Yuan said.

In the Bay Area, ASAP also owns the DoubleTree by Hilton, a 378-room waterfront hotel in the marina area of Berkeley.

The company believes the long-term prospects look excellent for its newly bought hotel in north San Jose.

“Everyone knows that Silicon Valley is the best investment in the world,” Yuan said. “Silicon Valley is the heart of the future of the United States.”