By outdoor-nature-child.com The owner of Signia by Hilton San Jose is taking steps to secure critical financing in order to avoid defaulting on loans. According to a report by Mercury News, the hotel is facing threats from its current lender, BrightSpire Capital, who is considering exercising their right to take back the property due to loan delinquencies. However, the hotel’s owner, Sam Hirbod, has a plan in place for new financing.
Located at 170 South Market Street in downtown San Jose, the hotel boasts 541 guest rooms. BrightSpire Capital has provided a financing package totaling approximately $165.3 million, with a default notice already submitted and plans for the property to be auctioned off, potentially triggering the cancellation of the hotel’s redemption rights.
Hirbod stated that he has reached new financing agreements with four lenders who are prepared to offer better terms, and Hilton has agreed to support these efforts. He firmly opposes any attempts by BrightSpire to revoke the loan redemption rights and seize the hotel. Public records indicate that an auction regarding the cancellation of these rights could take place in November.
“We will take all necessary measures, including bankruptcy, to protect the hotel, our employees, the brand, and the substantial assets we have in the property,” Hirbod emphasized.
The fallout from the pandemic has led to many hotels in California facing challenges, as COVID-19 significantly reduced guest numbers and hindered tourism in both the global and Bay Area markets. Since purchasing the hotel in 2018 for $223.5 million, Hirbod’s ownership group has invested $74 million in renovations, upgrades, and improvements.
In November 2023, the group sold the south tower, which has 246 guest rooms, to Throckmorton Partners for $73.1 million. This buyer then renovated the tower, transforming it into student housing for San Jose State University.
With the hotel now performing well, Hirbod believes BrightSpire is attempting to take ownership of the property. “The hotel is generating positive cash flow and it continues to grow. Heading into 2025, our momentum is incredible,” he stated confidently.
Hirbod is optimistic that the latest financing arrangements with the four lenders will ultimately come to fruition.