SAN JOSE — The Signia by Hilton, the largest hotel in San Jose, reached what appears to be the final stages in a long-running effort by its owner to refinance the property’s existing loan, according to documents filed on April 17 in Santa Clara County Superior Court.

The refinancing effort advanced far enough that investment committees are slated to meet this week to approve the new loan package for the hotel so that the fresh funds could be in place within two weeks.

The new funding is being pursued at a time when an affiliate of New York City-based BrightSpire Capital threatens to foreclose on the existing loan for the hotel at 170 South Market St. A minor portion of BrightSpire’s $136 million loan is in default.

The ownership group filed a lawsuit in February against BrightSpire Capital, hoping to create enough breathing room to complete a refinancing of the 541-room hotel.

New lenders, including Bridge Investment Group and NexPoint, have agreed to provide enough financing to replace the BrightSpire loan and refinance the hotel. Bridge would provide the primary new loan, and NexPoint would provide a secondary loan.

Another key financial player in the hotel is Hilton Worldwide Holdings, which has a $29.3 million mezzanine, or secondary, loan on the hotel.

“All terms are agreed,” attorneys for the hotel’s ownership group stated in court papers. “All due diligence is complete.”

An executive for Bridge Investment Group provided a letter filed with the court that sketched out a swift timeline to fund the loan and accomplish the refinancing.

“I anticipate presenting this deal to our investment committee during an ad hoc meeting set for April 24, with funding to occur shortly thereafter,” Bridge Investment Group managing director Gary Duff stated in an April 17 letter.

Separately, NexPoint stated that it is moving at roughly the same pace as Bridge Investment to accomplish the NexPoint portion of the financing package.

“Similar and aligned with Bridge as our senior partner, we anticipate presenting this deal to our investment committee,” NexPoint Executive Vice President Jesse Blair said in an April 17 letter. The NexPoint committee is also slated to meet on Thursday, with a loan closing soon after that.

Sam Hirbod, a Bay Area business executive who leads the hotel’s ownership group, described the efforts to fashion a refinancing deal.

“For the past month, the hotel and its transactions counsel have worked continuously with the hotel’s broker, Michael Thorp, and new lenders Bridge, NexPoint, and Hilton Worldwide Holdings to coordinate all three lenders’ accommodation of the other lenders’ requirements,” Hirbod stated in a sworn affidavit filed with the court.

The endeavor has been intricate and intense, Hirbod said.

“This has been a labor-intensive effort in which all three lenders have cooperated,” Hirbod said.

In 2018, Hirbod’s ownership group paid $223.5 million for what was at that time an 805-room hotel with two towers. That price worked out to about $278,000 a room. The hotel’s appraised value as of October 2024, based on the current 541 rooms, was $217.4 million, or $402,000 a room, federal bankruptcy court papers show.

Hirbod stated in Santa Clara County court filings that he has invested $170 million into the hotel.

That investment includes a $90 million down payment to buy the hotel in 2018, $26 million in interest payments to the lender while the hotel was closed during COVID-linked shutdowns, and $54 million to renovate the hotel in 2023 and 2024.

“While so many business owners in San Jose walked away from their businesses during COVID — leaving their buildings hollow shells and boarded-up storefronts on the streets of San Jose — I doubled down during COVID,” Hirbod stated in the court filing.

In 2023, Hirbod took steps to further stabilize the hotel’s finances through the sale of the 264-room southern tower. Throckmorton Partners paid $73.1 million to buy the tower and convert it into housing for San Jose State University students. The southern tower is now known as Spartan Village on the Paseo.

The hotel’s ownership group filed for bankruptcy in 2024 for the second time in three years, hoping to ward off BrightSpire’s attempt to foreclose the loan and seize the property. The first bankruptcy was filed in 2021.

In December 2024, the search for funding bore fruit when Bridge Investment Group sent the hotel owner a proposal to provide $145 million in financing to replace BrightSpire’s existing primary loan.

Some challenges remain beyond the final approval by the loan committees. BrightSpire must provide a firm payoff dollar amount, a process that is well underway, court papers show. An escrow has been opened as a repository for the funds.

“BrightSpire has told the court that it just wants to be paid and that it has no desire to acquire the hotel” in a foreclosure sale, attorneys for the hotel ownership group stated in the April 17 filing. “Plaintiffs have worked diligently toward this end. Once Bridge’s loan committee approves the primary loan, this refinancing project will be headed rapidly toward closing, and BrightSpire will be paid in full.”