Aju sells San Jose-based hotel at $63 mn after five years

It says the sale came as the investment period ended, despite market speculations on pandemic-driven value loss

The Westin San Jose hotel in downtown San Jose

A-Young Yoon 1

2022-01-25 20:20:59 youngmoney@hankyung.com

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Aju Hotels & Resorts Co., a hospitality firm under Korean conglomerate Aju Group, has sold its San Jose-based hotel to an affiliate of US hospitality company Khanna Enterprises Ltd.

The Korean company acquired the hotel for $64 million in 2017 and sold it for $44.9 million with a 30% loss, some global media reported based on Santa Clara County Recorder's Office data. However, an Aju official told The Korea Economic Daily the $44.9 million sale includes only land and the building prices, and the actual sale price was around $63 million including furniture and intangible assets.

The global media said the property's value was heavily impacted by the pandemic. However, the Aju official said the property sale followed as the five-year investment period ended, and it was not due to the pandemic-driven loss.

The hotel, named The Westin San Jose, is housed in the landmark Sainte Claire Hotel building constructed in 1926. The six-story hotel has 171 guest rooms, 10 meeting rooms and many amenities.

The acquisition in 2017 was followed by Aju’s hotel purchase in the same region. In 2015, Aju bought a Holiday Inn in San Jose with 354 guest rooms for $53.5 million.

Aju has actively acquired US-based hotels for the past years under the leadership of Chief Executive Moon Yoon-hoi, who studied hotel administration at Cornell University and is the eldest son of the Aju Group chairman. In 2019, Aju bought two Hyatt hotels in New York – Hyatt Place New York/Midtown-South for $86 million and Hyatt Herald Square for $52 million.

In 2018, Aju acquired the AC Hotel Seattle Bellevue/Downtown in Washington state for $87 million from Marriott International Inc. In addition, the Korean hospitality company operates two more hotels in the US -- The Ven Embassy Row Hotel in Washington D.C. and Ace Hotel Downtown Los Angeles.

Founded in 1960, Aju Group owns subsidiaries in various industries. In addition to the hotel business, it operates venture capital firm Aju IB Investment Co., construction materials company Aju Corp., global car retailer Aju Networks, vehicle repair firm Aju Motors and others.

Write to A-Young Yoon at youngmoney@hankyung.com
Jihyun Kim edited this article.