Friday, January 26, 2001
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Posted on: Friday, January 26, 2001

Maui Hyatt sold for $200 million

By Andrew Gomes
Advertiser Staff Writer

New York-based private investment bank The Blackstone Group has contracted to buy the Hyatt Regency Maui Resort for an estimated $200 million from KM Hawaii Inc., an affiliate of Japan-based transportation company Kokusai Jidosha, according to people familiar with the deal.

An official with KM Hawaii could not be reached yesterday. A spokesman for Blackstone, a multibillion-dollar firm that has invested in numerous luxury resort properties including Hyatt hotels, declined comment.

Founded in 1985 in part by the former chief executive of Lehman Brothers, Blackstone has been looking for upscale hotel investments in Hawaii for several years. In 1998, the company unsuccessfully pursued one of Waikiki’s finest, the Halekulani.

People with knowledge of the Maui Hyatt deal said a purchase agreement for the 806-room Ka'anapali hotel — Maui’s largest — has been reached, and said Hyatt, which manages the property with about 1,000 employees, may be taking a small ownership interest in the hotel in exchange for a long-term management contract with Blackstone.

Officials at Hyatt International Corp. in Chicago did not return calls earlier this week. Barry Lewin, Hyatt Regency Maui general manager, declined comment yesterday.

If completed, the Hyatt sale would follow sales of four other major properties in 1998: the Maui Marriott Resort for $152.5 million; the Westin Maui for $132 million; the Grand Wailea for $263.5 million; and the Kea Lani for an undisclosed amount.

The Hyatt Regency Maui, trophy of the Kaanapali resort, also has been attractive to buyers. It was developed for $80 million in 1980 by luxury resort developer Christopher Hemmeter and sold to KM Hawaii by Chicago real estate firm VMS Realty for $325 million in 1987.

KM Hawaii spent about $30 million on renovations in 1990 and 1996. Last year, the hotel opened a $3.5 million spa.

Joseph Toy, president of Honolulu-based consulting firm Hospitality Advisors LLC, said that following an accumulation of hotel transactions in the last few years, there has been a growing incentive to sell by Japanese investors — many of whom overpaid for Hawaii hotels in the late 1980s.

"There seems to be an increasing sense of urgency on the sell side given that we’re on the top of the market now," Toy said.

Hotel room rates and occupancies hit a 10-year high last year, according to a recent survey by tourism consulting firm PKF Hawaii.

Doug Pothul, senior vice president of local commercial real estate firm Colliers Monroe Friedlander, said new owners of hotels should help maintain strength in the visitor industry.

"It’s always good to have new equity in the market," he said. "They breathe new life into a property. They have a vested interest in bringing people to Hawaii."

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