Wednesday, December 15, 2004

Kauai resort
will convert
to condo

A group is buying the
345-room Radisson Kauai

A group led by local real estate investor Brian Anderson has purchased the 345-room Radisson Kauai Beach Resort in Lihue and plans to convert it to condominiums for likely sale to investors.

The purchasing entity, KB Resorts LLC, bought the property in fee simple from Driftwood Ventures Inc. of West Palm Beach, Fla., which had owned the resort since 2000.

The entire worth of the deal was set at $67 million, according to mainland lenders who put up a portion of the funding. It was not clear how much of that represented the property purchase and how much would go into remodeling the rooms.

Anderson, who is head of Big Island-based Anekona Properties and son of Hawaii businessman and former politician D.G. "Andy" Anderson, did not return phone calls yesterday.

However, a consultant on the deal, Peter Herndon of Herndon Business Consulting LLC, said the partnership intends to spend around $5 million on renovations.

Condo conversion is becoming familiar ground for Anderson, who has found success in a pair of other recent "condotel" projects on Oahu and Kauai amid heavy demand for vacation properties.

Anderson should find the Radisson Kauai deal to be no exception, brokers say.

Kauai's condominium market has been picked clean in a flood of buying by mainland investors, and demand there remains extremely strong.

"There are still a lot of people looking and buying here and inventory is very, very thin," said Ken Kubiak, broker-in-charge with Century 21 All Islands' Kilauea office.

"With a decent price, anything sells over here right now."

Last year, Anderson and partner National Housing Corporation of Hawaii Inc. bought the 242-room Waikiki Terrace hotel and spent $11 million on renovations. The resulting 217 condotel units sold quickly.

More recently, Anderson's Puluwai LLC bought the leasehold interest in the Islander on the Beach hotel in Waipouli on Kauai for $18.3 million and put its 197 units up for sale at between $210,000 and $345,000. Sales contracts on more than half the units were signed even before Anderson's purchase of the resort closed in October.

He also recently purchased the W Honolulu Diamond Head hotel in Waikiki but has not yet announced any plans for a conversion.

Radisson expects to remain as manager of the Kauai resort, said the hotel's general manager Rob Gunther.

Driftwood Ventures bought the hotel, then known as the Outrigger Kauai Beach Hotel, in April 2000. Driftwood brought in Radisson to manage it and carried out a $10 million renovation.

Herndon said the property would remain open as a hotel during the condo conversion and that most of the renovations planned would be to back areas of the resort, minimizing disruption to guests.

Radisson Kauai Beach Resort

E-mail to Business Desk


© Honolulu Star-Bulletin -- http://archives.starbulletin.com