CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
Two of the flagship ResortQuest hotels in Hawaii are up for sale, reflecting continuing interest in Hawaii's hotel market. They include the ResortQuestWaikiki Beach Hotel at 2570 Kalakaua Avenue, above, and the ResortQuest Kauai Beach at Makaiwa.
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2 ResortQuest hotels up for sale
Offers are being taken for flagship hotels on Oahu and on Kauai
The owners of two flagship ResortQuest hotels in Waikiki and Kauai are putting the properties up for sale next month.
ResortQuest Waikiki Beach Hotel, formerly known as Aston Waikiki Beach Hotel, and ResortQuest Kauai Beach at Makaiwa, the former Courtyard by Marriott Kauai at Waipouli Beach, will be marketed simultaneously by New York brokerage firm Eastdil Secured LLC.
A private real estate fund managed by DB Real Estate Opportunities Group, a subsidiary of Deutsche Bank Group, is the majority owner of the properties, while Tennessee-based Gaylord Entertainment Co. holds a 19.9 percent ownership stake in the Waikiki property and an 18.1 percent equity interest in the Kauai hotel.
Gaylord Entertainment, which bought the Waikiki hotel in 2005 for $107 million, in June completed the sale of RQI Holdings Ltd., the parent company of ResortQuest Hawaii LLC, to Interval Acquisition Corp. for about $109 million in cash.
The hotels weren't part of that transaction.
CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
New York brokerage firm Eastdil Secured LLC is marketing both the ResortQuest Waikiki Beach Hotel, above, and the ResortQuest Kauai Beach at Makaiwa for undisclosed prices.
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DB Real Estate and Gaylord Entertainment jointly purchased the Kauai hotel last year for an undisclosed price, but which a source familiar with the transaction, who asked not to be identified, said was about $60 million.
Both properties are in the mid-priced market and recently completed extensive renovations.
The 644-room Waikiki beachfront hotel at 2570 Kalakaua Ave. last year completed upgrades totaling more than $15 million, in addition to a $30 million renovation completed in 2003. Rates range from between $300 and $500 per night.
Meanwhile, the 311-room Kauai hotel at 650 Aleka Loop in Kapaa, also completed a $30 million renovation last year. Rates at the property range from $250 to $1,000 per night.
"I'd describe the sale as a very unique opportunity for one or two different buyers to own two exceptional hotels," said Kelvin Bloom, Resort-Quest Hawaii president. "It's an opportunity that doesn't come along very often."
Brokers haven't placed a price tag on either of the properties, which will take offers from multiple prospective buyers. After a major renovation, a hotel property's value typically increases from 20 percent to 40 percent more per room, according to local brokers.
So far this year, the tourism industry has seen major properties change hands as equity funds and hotel companies actively seek to invest in Hawaii.
"Despite concerns in the credit markets, Hawaii remains an active transaction market, in which we'll see transaction values well in excess of $1 billion for 2007," said Joseph Toy, president of Hospitality Advisors LLC. "Investor interest in Hawaii remains very high."
