Transactions - JANUARY 12, 2018

Blackstone buys another Hawaiian hotel

by Andrea Zander

Blackstone Group has purchased the 450-room Turtle Bay Resort on the Hawaiian island of Oahu for approximately $330 million.

Blackstone Group paid $287 million for the real estate portion alone of Oahu's Turtle Bay Resort, according to Business Journal.

Since 2010, a consortium of international investment management firms that included Credit Suisse Group and Wells Fargo &Co., has owned the existing 450-room Turtle Bay Resort.

The 1,300-acre Turtle Bay site includes two golf courses, and farmland, as well as undeveloped land that the hotel has entitlements to build an additional 725 homes and hotel units.

According to the Honolulu Star-Advertiser, the current owners sought to find a partner or a buyer that would aid in the completion of the hotels approved, but yet to begin expansion projects.  Those plans include the development of 100 homes and 625 additional hotel rooms on either side of the resort. The plans have yet to be approved.

Blackstone also purchased the Waldorf Astoria-branded hotel Grand Wailea resort on Maui. The two hotels would be the firms first Hawaii hotel acquisitions since 2013, while it has sold off three since. In 2016 Blackstone reached an agreement to sell the leasehold interests in the Hyatt Regency Waikiki Beach Resort & Spa for $800 million to Mirae Asset Global Investments.

Transaction activity in 2017 is poised to exceed $1.5 billion, according to CBRE.

Other hotel acquisitions that closed in 2017 include a joint venture between Oaktree Capital and Trinity Investment has emerged as the winning bidder for the leasehold interest in the 623-room Hilton Garden Inn Waikiki Beach, in Honolulu.

During the first eight months of the year, properties on Oahu Island saw per-room revenue increase by 2.9 percent over the same period last year, according to STR. Elsewhere in the state, growth was more rapid: 11.6 percent in the Hawaii/Kauai Islands submarket and 10.1 percent on Maui Island.

As of the third quarter 2017, hotel supply in Hawaii amounted to roughly 54,300 rooms, compared with 53,200 rooms 12 months ago, an increase of approximately 2 percent, according to CBRE.

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