CUPERTINO As a sobering reminder of the shortcomings of the Bay Area’s weak lodging industry, a South Bay hotel with a chic design and a prime location close to a well-known Apple business center has stumbled into a loan default.
According to records submitted to the Santa Clara County Recorder’s Office on January 6, Aloft Cupertino risks foreclosure because of a past-due loan that finances the property.
The 123-room hotel is situated close to many Apple innovation hubs at 10165 North De Anza Blvd., a desirable Cupertino location.
Apple’s Infinity Loop facility is only a few blocks away from Aloft Cupertino. Before the computer giant moved its headquarters to the Apple Park spaceship complex, that facility housed the corporation for decades.
Despite the conclusion of company shutdowns tied to the coronavirus to stop the spread of the fatal infection, the Aloft Hotel’s loan delinquency is a new indication that economic maladies continue to plague the Bay Area accommodation and travel industries.
According to Alan Reay, president of Atlas Hospitality Group, which monitors the lodging sector, many hotels that are concentrating on commercial markets and business meetings—like the Aloft Cupertino—are suffering greatly from a decline in revenue.
The four-story hotel is part of the Marriott International Aloft brand, which is renowned for its contemporary architectural style.
According to publicly available records, the property owner received the notice of delinquency on the Aloft Cupertino loan from Cantor Commercial Real Estate Lending in 2014.
The property records show that the initial loan amount was $34 million. The total amount owed at the time of the default was $34.9 million, which included principal, interest, fees, and penalties.
The lender may foreclose on the financing instrument and auction the property if the loan is not repaid. In order to collect the outstanding balance, the lender may potentially take possession of the property.
According to data published by Trepp, which monitors and evaluates the commercial real estate and financing markets, the debt was previously referred to special servicing because of an effort by the lender to offer some relief to the borrower. According to Trepp, the loan’s missing payments were the reason for the special servicing status.
In 2022, the loan was adjusted to provide the hotel owner some leeway about the overdue payments.
According to Trepp’s information, that didn’t work either. According to Trepp, the hotel was still having trouble.
According to Trepp’s information article regarding the property, performance never recovered.
Owner of the Aloft Cupertino is an affiliate of the Shashi Group, which Dipesh Gupta is the CEO of. According to the hotel company’s website, Shashi Group has five hotels in the Bay Area, all of which are located in the South Bay.
Due to loan defaults and unstable financial frameworks, the hotel industry in the Bay Area is in terrible position.
Foreclosures have resulted in the seizure of several San Francisco hotels, including the historic Huntington Hotel on the famous Nob Hill.
A hotel in downtown Oakland was purchased for a price that indicates a significant decline in value. Another hotel in Oakland abruptly closed, resulting in a large loss of jobs.
According to Reay, revenue has decreased and interest rates are rising. As a result, your value likewise drastically decreases. The hotel owners are just claiming they are out of business with many of these debts.
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