Wednesday, August 11, 1999

Ilikai seen
good price

Hotel analysts call
the hotel 'attractive'

By Russ Lynch


Hotel analysts say the 35-year-old Ilikai/Hotel Nikko Waikiki, which is on the market, should attract many interested buyers.

"It's a highly attractive property," said hotel expert Robert Hastings, president of the commercial real estate firm Hastings Conboy Braig Associates Inc.

Hastings has had a role with the hotel by doing an appraisal of the property but is not involved in the sales effort.

"It's a highly attractive property," he said, although some work may needed to bring it up to the standards of a new operator.

"It's going to get a lot of interest. It's a top-quality property," Hastings said.

He said it would be unfair for him to suggest a price since he was the one who did the appraisal.

Another hotel analyst who requested anonymity also described the property as an attractive "decent buy." It should fetch $80 million to $100 million, said the analyst who is not involved in the sale. The analyst agreed that improvements may be needed, such as changing the outside appearance to get away from its somewhat old-fashioned look.

Jowa Hawaii Co., which bought the 800-room hotel in 1987 for $69 million and later spent $40 million on renovations, said yesterday that the hotel is on the market but it hasn't set a price.

"The investors are going to have a wide open field," said Kenneth L. Spence, senior vice president of Jowa Hawaii, which is a subsidiary of the Industrial Bank of Japan. The bank financed the $55 million purchase of the hotel in early 1987 by an Arizona group, Heller-White Hotels Inc.

In that transaction, Jowa obtained an option to buy the hotel and exercised that option in September 1987, keeping Heller-White on as manager. Nikko Hotels International took over the management contract early in 1991.

The hotel was developed as a hotel and condominium mix by Honolulu financier Chinn Ho and opened in 1964. Ho sold it to Westin in 1974.

The complex contains 500 separately owned condominium units in addition to the 800 hotel rooms and some of the hotel rooms are still configured in condominium style, with their own kitchenettes.

Spence said a change of ownership is not likely to affect employees. "

The employees have seen this happen before and they always survive," he said.

The employees at the hotel, who number about 400, have long been represented by the Hotel Employees and Restaurant Employees Local 5, and successive owners in the past have always recognized the union contract.

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