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SJSU completes $73 million deal to house students in downtown San Jose hotel tower

Screenshot 2023-11-21 090120

SJSU completes $73 million deal to house students in downtown San Jose hotel tower
Spartan Village on The Paseo tower may house 700 San Jose State students

By George Avalos | Bay Area News Group | PUBLISHED: November

Throckmorton Partners is buying the southern tower of the double high-rise Signia Hotel — formerly the Fairmont — and will lease the building to SJSU in a transaction that could dramatically improve the vibrancy of the city’s urban core.

The Bay Area real estate firm paid slightly more than $73 million to buy the southern tower, according to a grant deed in Santa Clara County.

“Our students are the heart of all that we do at San Jose State University,” said SJSU President Dr. Cynthia Teniente-Matson. “This new housing option will expand our campus footprint and add student vibrancy to the downtown corridor.”

The deal, described by the university as a “landmark agreement” that enables SJSU to “significantly expand its undergraduate housing inventory,” involves the sale of the 264-room southern tower of the 805-room Signia by Hilton San Jose hotel to real estate firm Throckmorton.

In addition to the purchase price, another $40 million is expected to be spent on improvements, loan fees, origination costs, property taxes and a separation of utilities from the northern and southern towers, according to Charlie Faas, SJSU vice president for administration and finance.

“San Jose State is growing and so is the energy surrounding what our downtown can become,” San Jose Mayor Matt Mahan said. “A building that is empty will be full of life as 700 to 800 young people move in. This is an example of the new, innovative strategies we need to address our statewide housing crisis.”

The future student housing complex is expected to be able to accommodate 700 students from SJSU. Spartan Village on the Paseo is a possible working title for the new student housing.

“SJSU is embarking on the Bay Area’s largest post-pandemic conversion of a downtown commercial property to student residential housing,” the university stated on Thursday.

In two years, San Jose State University has the option to buy the tower outright from Throckmorton Partners, upon approval of the California State University Board of Trustees.

“The Throckmorton team worked tirelessly over the past nine months to forge a partnership with the university and CSU and were exceptional in their attention to detail and focused efforts to meet the needs of the university and our students,” Faas said.

The deal leaves SJSU poised to dramatically widen the economic benefits the university already provides to downtown San Jose, as well as offering what could be an enticing place for students to live.

“Up to 700 planned student beds, including 124 affordable beds, brand new amenities including on-site dining, a fitness center, expansive study lounges, and a community kitchen give Spartans a stunning new place to call home,” SJSU states in a brochure that invites students to sign up for project updates.

This dynamic new housing endeavor is slated to become available to SJSU students in short order — not years from now.

“We’re offering a brand-new and unique opportunity to open up housing for our students in the fastest turnaround possible,” said Patrick Day, SJSU vice president for student affairs. “New student housing options are what our Spartans deserve.”

In the coming months, students who have been admitted for the 2024-2025 academic year will be receiving information about their housing options, including for the Spartan Village on the Paseo in what will be the former hotel tower.

“We are thrilled to announce our partnership with San Jose State University to transform the prestigious 5-star Signa Hotel into a state-of-the-art student housing facility,” Throckmorton Partners stated in a prepared release. “This project is not just about providing housing. It’s about creating a vibrant, supportive community for the university’s students.”

The renovation of the hotel is slated to begin almost immediately, officials said.

“Plans include a major renovation of the lobby and second-floor mezzanine spaces into a student-centric environment to support social activities and programs,” SJSU stated.

A wide range of amenities is also anticipated in the new student housing in the hotel tower.

“Amenities will consist of an expansive dining area and a community kitchen, a fitness center, a games room, co-learning spaces and a study lounge in the ‘sky bridge’,” the university said.

An elevated bridge over the paseo connects the two towers of the hotel.

With the completion of this deal, the northern tower of 541 rooms will remain a hotel. Marcus & Millichap commercial real estate agents Steve Jackson and Joe Owens represented the property buyer. JLL commercial real estate agents Matt Kroger, Brandon Geraldo, Ryan Wagner, Max Machiorlette, Melvin Chu, Charles Halladay and Mike Huth represented the seller.

“Bringing more of our students closer to campus allows them to focus on their success, expand their professional networks, and tap into the unique opportunities that proximity to the action of Silicon Valley has to offer,” Day said.

Full article: https://www.mercurynews.com/2023/11/16/san-jose-state-university-sjsu-real-estate-hotel-home-student-economy/