SAN JOSE — A foreclosure auction has cleared the way for a South Korea-based group to take ownership of a San Jose site where a hotel with hundreds of rooms has been approved — yet never built.
The hotel development property was bought for $27.6 million by the owner of the foreclosed loan, a group operating out of South Korea, after a brief public auction that was held in downtown San Jose on April 26.
A 200-room hotel has been proposed for an empty site at 7 Topgolf Drive in north San Jose’s Alviso district. City officials approved the hotel but the project was never built.
Pine Tree Specialized Private Investment Trust and KEB Hana Bank, which provided the original financing for the vacant land, filed a default notice against the loan and began a foreclosure process a few months ago.
Pine Tree Specialized and KEB Hana Bank found an investment group willing to assume control of the loan.
Sol San Jose Owner, a real estate entity based in Seoul, South Korea, was assigned ownership of the mortgage, county records show. Now, the property has a new owner in the wake of the public auction.
The loan assumption documents that were filed in April revealed only sparse information about the new ownership group beyond its location in South Korea’s capital city.
The proposed hotel development — approved by the city but never built — is located next to the Topgolf entertainment, dining and golfing complex in San Jose.
A South Korea-based company, operating as Mirae-San Jose, bought the land for the hotel site in 2019, paying $22.5 million for the property, according to the county real estate records.
In 2019, San Jose city officials approved a 200-room hotel project at 7 Topgolf Drive, planning documents show.
The coronavirus outbreak impacted the global economy in 2020, the year after the Mirae-San Jose group bought the hotel land and obtained the financing package that wound up in default and foreclosure.
The economic fallout from the coronavirus has battered the travel and hotel markets globally, including in the Bay Area. Hotel occupancy levels have tumbled in the wake of the virus cataclysm.
Coronavirus-linked economic uncertainties still loom over numerous hotel properties, especially hotel projects.
The highest-profile new development in the area is the bustling and popular Topgolf San Jose complex, which opened in 2021.
Topgolf has been a steady draw as an entertainment, sports, and dining center. Topgolf operates high-tech driving ranges that allow people to hit golf balls equipped with microchips that record distance and accuracy. The San Jose venue also includes dining and drinking facilities.
