Maui Land & Pineapple to buy Kapalua hotel
By Dan Nakaso
Advertiser Staff Writer
Maui Land & Pineapple Company, Inc. has signed an agreement to buy the luxury Kapalua Bay Hotel for an undisclosed price, pending a 60-day due diligence and inspection period.
The seller is an investment fund led by Morgan Stanley.
"The Kapalua Bay Hotel is a vital component in our revitalization plans for the overall resort," David Cole said. Cole is the chairman, president and CEO of Maui Land & Pineapple.
The Kapalua Bay Hotel has been on the market over the past several years without finding a buyer. But local real estate brokers have said that Hawai'i's hotel market has gotten more interest lately because of the Islands' rebounding tourism market, investor demand for hotels and available capital at low interest rates.
Maui Land & Pineapple owns the 19 acres below the 196-room hotel. The company also is the developer and operator of the Kapalua Resort, which is part of Maui Land & Pineapple's 23,000 acres of land holdings in West Maui.
"The Kapalua Bay Hotel is a vital component in our revitalization plans for the overall resort," David Cole, the company's chairman, president and CEO, said in a statement.
Paul Meyer, Maui Land & Pineapple's CFO, declined to offer details of the potential sale because of the due diligence period.
The Kapalua Bay Hotel, which opened in 1978, is valued for county tax assessment purposes at $49 million, including $18 million for the land.
In 1990, a group of investors from Japan and South Korea bought the hotel for $102 million. The partnership filed for bankruptcy in 1995. The following year, the Yarmouth Group investment firm bought the hotel.
The Yarmouth Group later was acquired by Morgan Stanley.
The Kapalua Bay Hotel is among five Hawai'i hotels that have been offered for sale this year.
Hawai'i last saw so much hotel movement six years ago, during the end of a nearly decade-long economic downturn.
Back then, Japanese investors were under pressure to sell hotels they had bought at inflated prices.
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.
