Big Island investor buys Kaua'i, Waikiki hotels
By Andrew Gomes
Advertiser Staff Writer
Big Island-based real estate investor Brian Anderson has arranged to buy the W Honolulu-Diamond Head hotel in Waikiki and the Aston Islander on the Beach in Kapa'a, Kaua'i, in separate deals expected to be finalized shortly.
The transactions are part of a cresting wave of investors betting on Hawai'i's growing tourism and real estate markets by purchasing hotels last sold as distressed properties during the state's economic slump in the 1990s.
Anderson, son of the restaurateur, real estate developer and former state legislator D.G. "Andy" Anderson, declined comment.
But others familiar with Brian Anderson's plans said he intends to sell Islander hotel units individually to investors after a major renovation. He would make no immediate major changes to the W.
Details of the deals are still being worked out, and they could fall apart short of closing. However, several people with knowledge of both transactions said they expected them to be completed as early as the next few months.
Managing both hotels is expected to continue as usual, with Starwood Hotels & Resorts operating the W and Aston Hotels & Resorts managing the Islander.
The seller of the W is Los Angeles-based investment firm Colony Capital, which bought the 13-story building in 1996 as part of a foreclosure, pre-empting purchase of two buildings formerly known as the Colony Surf Hotel at the far diamondhead end of Waikiki called the Gold Coast.
Colony Capital turned around and sold lodging units it owned in the oceanfront building to condo buyers, and spent $10 million to renovate the 50-room property, which Starwood began managing in 1999 as the W, its boutique brand catering to business travelers.
Andy Anderson, who owns Michel's restaurant in the ocean-front Colony Surf building, said the neighboring hotel is operating well. "It's turned around pretty good," he said, adding that he's offered to consult on restaurant operations at the W but is not participating in the purchase.
Colony Capital has been soliciting a buyer for the W for at least two years, and in 2002 had been asking $9.8 million for the hotel that is on a mix of fee-simple and leasehold land.
A Colony Capital spokesman withheld comment. A representative of Colliers Monroe Friedlander, the local real estate brokerage firm representing Colony, also declined to comment.
The Islander, a 200-room complex of low-rise buildings in the Coconut Plantation district near Lihu'e Airport, is being sold by a hui that includes Kaua'i real estate agent Terry Kamen.
Kamen declined comment, but Aston President Kelvin Bloom said he expects the hotel renovation to begin in late summer.
"It'll be completely repositioned — a top-to-bottom, wall-to-wall upgrade," he said. "I think it'll be a very positive addition to Kaua'i."
Bloom also said Aston expects most investors who buy the hotel units, which will be converted to condominiums after the renovation, to keep the units in a hotel rental program with Aston. "We're very excited about the future plan for condo conversion of the hotel," he said.
The Islander, which is on leasehold land owned by Niu Pia Farms Ltd., was previously acquired at a foreclosure auction in 1997 by an affiliate of mortgage holder First Commercial Corp. Kamen and partners bought the hotel two years later for about $5 million, made some upgrades and hired Aston to manage operations.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
