SAN JOSE — Wide-ranging efforts are underway to find merchants to fill the empty ground-floor spaces along two sides of the Signia by Hilton San Jose, endeavors that could help lift the downtown economy if they succeed.
Colliers, a commercial real estate firm, has begun to scout for dining establishments and retailers for the hotel tower at 170 South Market St.
“We are looking to lease about 30,000 square feet of spaces at the Signia,” said Nick Goddard, a senior vice president with Colliers. “We are going to put some high-end restaurants in some of those spaces. These will be very fine, swanky dining establishments.”
Some of the spaces will be leased to retailers, such as personal salons and spas, according to Goddard.
“We are already getting inquiries from some top-level restaurants,” Goddard said.
The spaces are for the sides of the building that front on the Paseo de San Antonio and South First Street, according to Goddard.
“Marketing efforts are not the problem with filling these spaces, it’s the uncertainty of the time and cost it will take to permit and occupy the spaces,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use and planning consultancy.
Finding more merchants for downtown San Jose is deemed crucial ahead of the potential influx of visitors expected to attend three mega sports events that are slated to occur in the South Bay during 2026.
“The City of San Jose needs to step up and provide proactive assistance in filling these key spaces,” Staedler said. “The wait-and-see approach has not been working to date. We don’t need to wait until after 2026 to realize that this is a problem.”
The 541-room, 22-story Signia by Hilton is San Jose’s largest hotel and was seized by its lender, BrightSpire Capital, through a foreclosure on May 12.
The lender’s foreclosure placed a value of $80 million on the hotel, which was 41% below the $134 million loan for the property.
During a July conference call with Wall Street analysts to discuss financial results, BrightSpire discussed its plans for the hotel in the wake of the foreclosure.
“Our intention is to make much-needed and neglected physical and operational improvements to the property ahead of significant events taking place in the Bay Area through mid-2026,” BrightSpire CEO Mike Mazzei told analysts. “We want to do things that we need to do to get that hotel fully operational and in peak condition before those events.”
The hotel fell into some level of disrepair as the prior ownership group was preoccupied with three court proceedings that were filed in an attempt to retain control of the property, according to BrightSpire.
“During the protracted foreclosure process, the hotel experienced meaningful deferred maintenance,” Mazzei said. “There was some distress at the asset. There were just basic things like elevators. Some elevators were not operating and offline.”
BrightSpire has signaled the possibility that it might attempt to sell the hotel after the major sporting events next year.
San Jose hotel operators hope to capitalize on the Super Bowl, multiple matches for the FIFA World Cup, and several of the games of the men’s college basketball tournament that are being held in the South Bay in 2026.