$35M hotel project coming to San Jose’s North First Street

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Two new hotels are headed for the old Piercey Toyota lot on San Jose’s North First Street, not far from San Jose Mineta International Airport.

San Diego-based Kalthia Group Hotels has proposed a 145-room Hampton Inn and Suites, and a 140-room Home2 Suites for the four-acre site at 2116 N. First St., developers told me. It will be the first appearance in Silicon Valley for Kalthia and the Home2 brand.

The $35 million project represents yet more hospitality development after years of virtually nothing getting built in the San Jose airport submarket. Today, several properties — including a 175-room Residence Inn and 146-room SpringHill Suites — are under construction in the area, and others are upgrading their facilities.

“For a long long time, no new hotel was built in the San Jose airport area,” saidJayvant Shah of Kalthia. “So we started looking a long time ago for a project to do in the San Jose area. We looked at a couple of sites and found this one.”

Tim L. Edgar, a senior vice president at Irvine-based Atlas Hospitality Group, which closely tracks the region, said the area is among the most attractive in the state for new development. The reason? All the new office under construction and on the boards. The Kalthia site is spitting distance from the proposed 10-building office campus being developed down the street at Brokaw Road by Peery-Arrillaga.

“The thing is, there’s a lot going on in terms of additional demand generators, which developers are looking at,” Edgar said. “The average daily rate right now in San Jose, any midweek day, is just insane quite frankly. It’s hard to get a room. You’re paying over $100 to stay at Motel 6.”

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