SANTA CLARA, CA-Stanford Hotels is the new owner of the 280-room Hilton Santa Clara. The San Francisco-based hotel owner and operator closed on the leasehold acquisition last week. The four-year-old, four-star Hilton Santa Clara is located across from the Santa Clara Convention Center and within a few miles of several Fortune 500 companies, including Cisco Systems, Intel and Applied Materials. In an announcement by Jones Lang LaSalle Hotels, the brokerage firm involved in the deal, the seller is listed as Santa Clara Hotel LLC, which according to other local brokers includes Oaktree Capital Management as majority partner and Franklin Croft as minority partner. None of the parties associated with the transaction would comment on the specific financials of the deal, however local hotel brokers familiar with the deal tell the sale price was somewhere between $130,000- and $145,000 per key. JLL Hotel managing director Arthur Buser tells that while the cap rate for the seller was well below average, the cap rate for the buyer will be average or better, in part because Stanford will be self-managing the property. Buser declined to say what the average cap rate is in the area, other local hotel brokers tell the average cap rate on recent Silicon Valley deals is around 6%.”Since the 1960s, The Silicon Valley hotel market has gone through continuous 10-year cycles of boom and bust, and we’re clearly coming off the most recent bust,” he says. “In keeping with this recurring cycle, it is certainly a smart buy for (Stanford Hotels); it’s a triple-A location and Santa Clara will be the first Silicon Valley submarket to recover.” In addition to being well located in a recovering market, Stanford’s SVP of operations Clyde Guinn says the company’s interest in the hotel includes the young age of the property, the right branding, and the fact that Stanford buys properties for long-term hold. “We’ve only sold two hotels in 20 years,” says Guinn. “We are patient money.”

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