Dallas trust bids for
Alana hotel

The $18.5 million offer could be topped
at a hearing later this month

By Russ Lynch

A Texas-based real estate investment trust that specializes in hotel investments will buy the 313-room Alana Waikiki Hotel for $18.5 million, if its bid is accepted in court.

Patriot American Hospitality Inc., based in Dallas, offered that amount as the highest bid in a foreclosure auction yesterday.

However, there could be a further bidding at a confirmation hearing in state Circuit Court, set for Aug. 19.

Patriot American owns 20 hotels with a total of 8,201 rooms and a total value of $581 million, Diane Golden, acquisitions associate at the company, said today.

Seventeen of the hotels are operated under franchises to Hilton, Marriott, Sheraton and other well-known hotel operators, she said.

The trust's shares are traded on the New York Stock Exchange.

The Alana Waikiki, at 1956 Ala Moana across from Fort DeRussy and near the new convention center, would be the trust's first investment in Hawaii, she said.

The trust's bid, offered under the name NorthCoast Hotels, beat out a lower bid by Unity House, the labor organization that had once owned the hotel.

Yesterday's bidding was only a first step and there still could be other offers, cautioned Joseph Toy, the court appointed trustee who conducted the sale.

"It's highly likely that we will see additional bids at the confirmation hearing," he said.

Toy said he expected really conservative bidding at the auction yesterday and that is what happened. "It was really the first step," he said.

Toy described Patriot American as the biggest hotel real estate investment trust in the nation.

Mitsui Leasing & Development Ltd., which financed Japanese investors' purchase of the hotel in 1989, forced the auction through a foreclosure suit in court.

Mitsui told the court it is owed more than $55 million, including interest, for the loan on the hotel and an adjacent office building.

The court agreed with Mitsui that GRC International, which bought the hotel from Unity House, was in default on the loan and ordered the sale.

In the foreclosure process, bidding can reopen at the confirmation hearing if an offer comes in that is at least $500,000 more than the top bid at the auction.

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Community] [Info] [Stylebook] [Feedback]