The bankrupt Fairmont San Jose hotel in Silicon Valley reached a restructuring deal with secured lender Colony Credit Real Estate Inc. and said it hopes to rebrand as a Signia Hilton, JW Marriott or Grand Hyatt, WSJ Pro Bankruptcy reported. A two-tower, 20-story and 805-room luxury hotel that has frequently hosted technology conferences, the Fairmont San Jose is the latest lodging property to file for bankruptcy as a result of a downturn in business during the coronavirus pandemic. The owners of the hotel closed the property earlier this month amid a fight with Fairmont, which managed the hotel. The chapter 11 filing in the U.S. Bankruptcy Court in Wilmington, Del., lists roughly $185 million in debt, nearly all of it owed to publicly traded real-estate investment trust Colony Credit. Colony Credit is managed by publicly traded investment firm Colony Capital Inc., which also owns roughly a third of the REIT. Though normally a profitable property, the privately owned hotel said its average occupancy rate during the pandemic has been 8%. Conventions and other events, usually major revenue generators, currently aren’t being scheduled, it said. Losses last year exceeded $18.6 million and are projected to surpass $18.8 million this year, the hotel said. The business said in a court filing that it asked whether Fairmont was willing to provide financing to help get the hotel through the pandemic. Fairmont declined, but at the same time has fought efforts to end its management contract or take its name off the hotel, which opened in 1987 and was expanded in 2002, the filing said.
