SAN JOSE – The development site for a boutique hotel in San Jose has fallen into a loan default, raising fears that the lender could seize the parcel through a foreclosure.
The lender for the site has issued notice that the loan is in default, according to a document filed with the Santa Clara County Recorder’s Office on October 6.
Site at 2850 Stevens Creek Blvd. The location in San Jose is where city officials approved the development of an 11-story hotel. Presently, a petrol station occupies the property.
The first credit bank, the lender for the property, warned in the document that it could freeze the loan and seize ownership of the parcel.
The lender provided $6.7 million in financing to the property’s owner and developer, Stevens Creek Cambria. That affiliate is led by Adil Mahmood, chief executive of Villa Developers & Investments, government business records show.
Stevens Creek Cambria received funding in 2019, county documents show.
The hotel, if built, would sprout at a choice location a short distance from the interchange of Interstate 880 and Stevens Creek Boulevard.
The 0.6-acre property is across the street from the Westfield Valley Fair shopping mall, down the street from Santana Row and near major operations for tech companies such as Apple, NetApp and Splunk.
San Jose officials approved the development before the outbreak of the coronavirus began causing widespread damage to the economy in general and the leisure and hospitality sector in particular.
The property owner obtained financing before the virus outbreak.
The impact of the deadly bug hit the travel and accommodation industries and ruined the development business model for almost all hotel projects, which were not doing well before the widespread business shutdown in March 2020.
The proposed hotel was approved for 175 rooms and would include a lounge and a rooftop restaurant.
Henry Cord, who was once a consultant for the project, did not respond to a request for comment. Mahmood could not be reached for comment.
Marcus & Millichap, a commercial real estate firm, has circulated a brochure that lists properties for sale.
According to the sales package, the asking price is $20.8 million.
“Key Hotel Development Opportunity in Pride of Ownership” is how the Marcus and Millichap brochure describes the site.