San Jose boutique hotel development site tumbles into loan default

SAN JOSE — The development site for a boutique hotel in San Jose has tumbled into a loan default, raising the specter that the lender could seize the parcel through a foreclosure.

The lender for the site has issued a notice that the loan is in default, according to a document filed on Oct. 6 with the Santa Clara County Recorder’s Office.

The site at 2850 Stevens Creek Blvd. in San Jose is the location where city officials have approved the development of an 11-story hotel. At present, a gasoline station occupies the property.

First Credit Bank, the lender for the property, warned in the document that it might seek to foreclose the loan and seize ownership of the parcel.

The lender provided $6.7 million in financing to the property owner and developer, Stevens Creek Cambria. That affiliate is headed by Adeel Mahmood, principal executive with Villa Developers & Investment, government business records show.

Stevens Creek Cambria obtained the financing 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 Westfield Valley Fair shopping mall, is down the street from Santana Row and is near major operations of tech companies such as Apple, NetApp and Splunk.

San Jose officials approved the development before the coronavirus erupted and began to inflict wide-ranging damage to the economy in general and the leisure and hospitality sector in particular.

The property owner obtained the financing before the outbreak of the virus.

The effects of the deadly bug battered the travel and lodging industries and wrecked the business models for the development of nearly all hotel projects that weren’t well underway before wide-ranging business shutdowns began in March 2020.

The proposed hotel was approved for 175 rooms and would include a lounge and rooftop restaurant.

Henry Cord, who at one point was a consultant for the project, didn’t respond to a request for comment. Mahmood couldn’t be reached for comment.

Marcus & Millichap, a commercial real estate firm, has circulated a brochure that lists the property for sale.

The asking price is $20.8 million, according to the sales package.

“Prime hotel development opportunity in a pride of ownership location” is how the Marcus & Millichap brochure described the site.