Korean firm buys site for big hotel in new north San Jose entertainment district

SAN JOSE — A South Korean hotel operator has taken a significant step in its push to open a big new hotel in north San Jose by purchasing the land it needs to build the new lodging, which would be part of an entertainment district that’s planned for the area.

Shilla Stay is eyeing a hotel at a site in the vicinity of 4701 N. First St. in San Jose, according to city planning documents.

Milpitas-based Terra Development, the owner of 40 acres where an “entertainment district” is expected to sprout in north San Jose’s Alviso area, has sold some of its property for the hotel site, Santa Clara County property records show.

“Terra still owns the Topgolf site,” Jag Kapoor, president of Terra Development, said in an email to this news organization. “We have only sold a 3-acre hotel parcel to Shilla Group.”

The buyer, operating with the name Mirae San Jose, paid $22.5 million for the hotel site, according to county public documents that were filed on July 29. The buyer also obtained a loan of $26.4 million from South Korea-based KEB Hana Bank, the property records show.

The hotel is expected to be 200 rooms, Kapoor said. The time frame for the hotel’s construction wasn’t immediately known.

Topgolf operates high-tech driving ranges that allow people to hit golf balls equipped with microchips that record distance and accuracy. The venues typically also include dining and drinking establishments.

Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the California lodging market, has visited the Topgolf complex in Las Vegas and came away impressed by his visit.

“The venue is amazing, it’s phenomenal,” Reay said. “I think Topgolf will do really well there, with all the tech companies and tech employees in the area.”

The Shilla Stay hotel could also do well, in Reay’s view. But that’s not necessarily because the Topgolf operation will drive visitors to the adjacent hotel. Rather, the hotel’s location in Silicon Valley, home to a red-hot job market and tech boom, could underpin the facility’s success.

“People with business connected to Google, Apple, Facebook could drive demand for the new hotel,” Reay said.

CBRE commercial real estate firm brokers Hyoung Chon, Sherman Chan, Tiffany Bird, Nick Whitstone, and Henry Bose arranged the transaction for both the buyer and the seller.

The 40-acre entertainment district being crafted by Terra Development fronts on North First Street, lies between Nortech Parkway and Gold Street, and is perched on the banks of the Guadalupe River in the Alviso community.

“We are under construction and will be opening in San Jose next year,” said Morgan Schaaf, a spokeswoman for Dallas-based Topgolf. “We can’t wait.”

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