Posted on: Friday, July 9, 2004
2 Outrigger hotels changing owner
By Andrew Gomes
Advertiser Staff Writer
New York-based investment firm Blackstone Real Estate Advisors has agreed to purchase two Outrigger Enterprises hotels, the Waikoloa Beach Marriott on the Big Island and Wailea Marriott on Maui.
Advertiser library photo Blackstone said it plans to make major renovations to both hotels soon, and will retain Marriott International to manage the properties as was done under Outrigger.
It was unclear how employment of the hotels' roughly 800 workers would be handled. Outrigger said only Blackstone could comment on whether employees would be retained, and Blackstone officials could not be reached yesterday.
The 521-room Wailea Marriott and 545-room Waikoloa Marriott could sell for more than $150 million, roughly the combined value of the two hotels assessed by county appraisers for property tax purposes.
Outrigger bought the Waikoloa hotel in 1998 for $49 million, according to property records, and spent $23 million renovating the property. The company purchased the Wailea hotel in 1999 for $41 million, according to property records, and spent $25 million on renovations.
The company has said the Wailea and Waikoloa properties have performed extremely well since introduction of the Marriott brand and booking system under a franchise arrangement 18 months ago.
Outrigger announced its intent to sell the hotels in January as a way to help finance company growth that includes renovation and development work, though sale proceeds also could be used to reduce debt or for other purposes.
The biggest growth initiative for Outrigger is its $350 million Waikiki hotel redevelopment plan along Lewers Street. The project involves converting one hotel to time-share, selling two others as resort condominiums and constructing a new high-rise with a mix of residential condos, condos for hotel use, some hotel units and possibly time-share.
Outrigger Enterprises, which owns and operates hotels under its Outrigger Hotels & Resorts and Ohana Hotels & Resorts brands, is the largest lodging company in Hawai'i. It operates 51 hotels and resorts throughout the Pacific plus 14 properties on the Mainland.
Blackstone is a unit of buyout firm Blackstone Group LP, and manages more than $6 billion of investment capital. The firm acquired the Hyatt Regency Maui Resort for an estimated $200 million in 2001, and sold the hotel to Host Marriott Corp. last year for $321 million.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
Honolulu-based Outrigger yesterday announced the binding agreement, which is expected to result in a completed sale as early as the end of the month for an undisclosed price.
The Waikoloa Beach Marriott on the Big Island, which Outrigger bought in 1998 for $49 million, is being sold to a New York-based investment firm for an undisclosed price. The sale, which may be done at the end of the month, also includes the Wailea Marriott on Maui.
