T
he sale of the historic Hotel De Anza in Downtown San Jose for $11.5 million to Dhaval Panchal's 233 W Santa Clara LLC marks a significant shift in the Bay Area hotel market. The Art Deco landmark, which sold for nearly half its price from a decade ago, was purchased by Panchal behind a limited liability company with ties to HotelAVE, a Rhode Island-based hotel asset management firm.
The sale price of $115,000 per room represents a 44% discount off the hotel's last known value and is 54% below its assessed value. Industry experts warn that this deal could have far-reaching implications for hotel valuations across the region. "This could hurt hotel values throughout the Bay Area," said Alan Reay, president of Atlas Hospitality Group.
The Hotel De Anza, a signature landmark in San Jose, closed in May citing maintenance issues and was managed by Hyatt Hotels until Monday. Panchal's ownership group obtained $13 million in financing to purchase the property, which will be operated as a luxury boutique hotel with plans for fine dining and a full-service bar.
