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New 163-room hotel planned for Sunnyvale

San Francisco Business Times

March 12th 2014

In yet another sign of strong hospitality development winds here, a group of hotel-industry veterans has purchased a 1.56-acre Sunnyvale site where they are looking to build a new hotel.

A partnership that includes local hotel developers Kelly Heil and Bob Longinetti, as well as Dewey Weaver of the hospitality firm InterMountain, paid about $5 million for the site at 861 East El Camino Real. The seller of the property, currently leased to Summewinds Nursery, was a family trust.

The hospitality group has already turned in a preliminary application to the city to develop the site into a 163-room hotel. Heil told me that no brand has been secured for the property just yet. But given recent development trends, it is likely to be a "select service" type of brand catering to business travelers.

"We're just very excited about this trade area. Cupertino and Sunnyvale are thriving," Heil said. "This is like a dream deal."

Heil and Longinetti are also the developers behind the Hilton Garden Inn at 10741 North Wolfe Road in Cupertino. InterMountain is a developer, owner and operator that has more than 75 properties across its national portfolio, including flags of Hilton Hotels Corp., Marriott International, Hyatt Hotels Corp., Startwood Hotels, InterContinental Hotels Group and others.

This is hardly the only hotel project under development in Sunnyvale. Two miles down the road, T2 Development is developing a 145-room Courtyard by Marriott at a former car dealership at 660 W. El Camino. Shashi Group is undertaking a conversion to the Aloft brand of the old Pacific Inn at 170 S. Sunnyvale Ave. And the Sheraton Hotel Sunnyvale has turned in plans to add a nine-story, 169-room tower to its existing property at 1100 North Mathilda Ave.

Driving the development activity is strong numbers for average room rates and occupancy. As my colleague Lauren Hepler wrote last month, Atlas Hospitality Group's Q4 report found a 94 percent increase in median room prices in Santa Clara County and a 40 percent median nightly rate increase in San Mateo County.

In this latest deal, Colliers International's Rick Knauf and John Machado represented the seller, according to a property brochure