Big homebuilder lands deal to buy long-time hotel in Los Gatos

Developer aims to replace Depression-era hotel with housing

LOS GATOS, CA — A major Bay Area homebuilder has agreed to purchase a Depression-era Los Gatos hotel as a possible precursor to a housing development in a prime location.

SummerHill Homes has agreed to buy Los Gatos Lodge, a well-known hotel on a prime location in the affluent town.

According to documents filed with the Santa Clara County Recorder’s Office on Oct. 20, the homebuilder is purchasing an 8.8-acre site at 50 Los Gatos-Saratoga Road.

The purchase agreement’s terms were not disclosed in the public filing.

“We will replace the lodge with housing,” SummerHill Homes’ director of marketing Anabelle Salum said in an email to this news organization.

The garden-style hotel has 128 rooms spread across several buildings.

Keet Nerhan, a Bay Area resident, manages the seller’s entity.

This is not the group led by Nerhan’s first attempt to sell Los Gatos Lodge.

Nerhan signed a sales agreement with Nexus Development, an Orange County-based real estate firm, in 2019. According to county documents, that agreement was terminated three months later.

Alleghany Properties sold the hotel to Nerhan in 1996. The financial terms were not disclosed.

“The original hotel was built in 1936 and has not undergone significant remodeling or reconstruction since the 1970s,” according to a 2014 report distributed by the Town of Los Gatos.

Following the coronavirus-caused business closures imposed by state and local government officials to combat the spread of the deadly virus, numerous hotel properties in the Bay Area and across the country have struggled to regain their pre-COVID economic vibrancy.

As a result, some developers see housing as a viable alternative.

According to the municipality’s 2014 report, multiple real estate firms appear to see residential development as a viable future use for the old Los Gatos Lodge.

According to the report, “the town has received numerous inquiries from prospective residential developers” about purchasing the Los Gatos Lodge property.