MILPITAS — A South Bay hotel has been bought by a California group in a purchase that suggests weak values in the lodging sector have begun to entice more investors.
The Element hotel at 521 Alder Drive in Milpitas was bought for $46.2 million by an affiliate of San Diego-based Pacifica Host Hotels, a grant deed filed in Santa Clara County on July 15 shows.
By some measures, the deal for the 194-room hotel offers hopeful signs for the reeling hospitality sector in the Bay Area. By other metrics, however, the transaction is a reminder that ailments still linger for hotels in the region.
The Milpitas hotel was bought at a price that equated to $237,900 a room. That was considerably higher than the $109,243 median price for hotels sold in Northern California during 2025, as reported by Atlas Hospitality Group.
The deal, though, also hints at a flat price for the Milpitas hotel. The Element hotel’s price was only 1.7% above its assessed value of $45.6 million in January 2026. Assessed values are one of multiple metrics to measure how much a property is worth.
The plunge in hotel values could be starting to entice investors. Some buyers are landing hotels in the Bay Area at ultra-low prices.
A 128-room Hyatt House hotel in Pleasanton was bought for a stunning $800,000, or just $6,250 a room. A Hyatt House hotel in Pleasant Hill was purchased for $3.3 million, or $23,200 a room. Both hotels were acquired in June.
The new ownership group for the Element hotel in Milpitas states that it is involved with 45-plus boutique, lifestyle and branded hotels in the United States.
“We operate a large chain of hotels in some of the best locations across the nation,” the company states on its website. “We have a large footprint across the West Coast, Texas, and Florida, as well as Mexico.”