The company successfully bid the upset price of $4 million for 24 apartments and a 3,000-square-foot penthouse in the Colony Surf building on the beach near Diamond Head, said Harvey Masuda of Global Realty, which conducted the auction yesterday.
In a separate successful bid, Colony Capital also offered $7 million for 50 apartments, a 2,500-square-foot penthouse and retail and commercial space in the 13-story Colony East building next door. Both buildings are on leased land.
A third auction for the space once occupied by the Bobby McGee's restaurant in the Colony East building attracted no bids, Masuda said.
The buildings were the subject of a foreclosure in October by First Hawaiian Bank, which was owed some $10 million by then-owner, Colony Surf Development Corp. (Colony Surf Development is not affiliated with Colony Capital.)
Colony Capital, which also acquired two fee-simple parking lots on the site, intends to operate the properties as a hotel.
The Colony Surf Hotel opened in 1961.
"The Colony Surf is located on one of the most prized stretches of beach in a more secluded area of Waikiki," said Thomas J. Barrack Jr., president and chief executive officer of Colony Capital. "It has a history as the most exclusive small hotel in Waikiki with an astounding reputation of uncommon Hawaiian hospitality."
Colony Capital, an international private investment firm that puts together partnerships to buy real estate, bought the former Hyatt Regency Waikoloa on the Big Island in 1993 for a fraction of its development price and, with Hilton Hotels Corp. as a partner and manager, renamed it the Hilton Waikoloa Village.
Late last year, Colony bought the former Ritz-Carlton, Mauna Lani, also on the Big Island's Kohala Coast, chose Sheraton Hotels to manage it and renamed it the Orchid at Mauna Lani.
In related news, Michel's at the Colony Surf, a restaurant not included in the auction yesterday, will reopen July 27, the management said. The restaurant was closed last fall.
General Manager Michael Tsue said it will return to its old style as a high-class French restaurant. "We're bringing Michel's back to Michel's," he said.
Bob Clark, who was maitre d' at Michel's for 26 years, will return to his old job and the chef will be Daniel Dufort.
The restaurant, closed since last fall, is now owned by former Hawaii legislator D.G. "Andy" Anderson, who also owns the John Dominis restaurant at Kewalo Basin.