Hotel being sold
A Chicago-based groupBy Rick Daysog
is buying the Kona property
A Chicago-based partnership is buying the 318-room Keauhou Beach Hotel on the Kona Coast of the Big Island.
Trinity Investment Trust L.L.C., which is also purchasing the mortgage to the Aloha Tower Marketplace, has signed a letter of agreement to acquire the beachfront hotel from Azabu USA.
The hotel, built in 1970, sits on land leased from the Bishop Estate. It employs 165 workers.
The price was not disclosed but Azabu, the local unit of Japan-based real estate giant Azabu Building Co., said the deal could close within the next 90 days.
Azabu, headed by maverick deal maker Kitaro Watanabe, acquired the Keauhou Beach Hotel in 1987 for $13 million. During the 1980s, Azabu invested about $600 million in Hawaii, acquiring the Hyatt Regency Waikiki, the Ala Moana Hotel, the Maui Marriott and the Kona Lagoon.
Since then, Azabu has run into a string of financial difficulties. In 1993, lender Mitsui Trust & Banking Co. filed a foreclosure suit on the 1,200-room Hyatt Regency. In 1994, Mitsui wrote off $1 billion in bad debts from loans to Azabu.
Last month, Tokyo officials arrested Watanabe and two other Azabu officials alleging that they illegally concealed company assets from creditors. Azabu's Hawaii subsidiary said then that the arrests had no effect on the company's local operations.
Trinity, meanwhile, is part of a new wave of American buyers who are purchasing properties from financially troubled Japanese investors.
The company -- whose investors include former VMS Realty executive George Ruff, local attorney Jon Miho and hotel developer Charles Sweeney -- is trying to acquire the $60 million mortgage to the Aloha Tower Marketplace from Mitsui and take over the waterfront complex.
Last year, Trinity and Apollo Advisors L.P. bought the $130 million mortgage to the nearby Harbor Court luxury office and condominium complex for an undisclosed price from Mitsui.
Trinity has also joined up with Apollo, time-share operator Signature Resorts Inc. and Goldman Sachs' Whitehall Fund to buy the 413-room Embassy Suites Resort on Maui for $78 million.