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Ares JV buys Hawaii Ritz Carlton for $172.5m

A Colony Capital JV sold the 49-acre property to a four-party investor group that includes the Los Angeles-based global alternative asset manager.

The Ritz-Carlton, Kapalua in Maui, Hawaii has changed hands from one private equity real estate joint venture to another, according to a statement last week.

Los Angeles-based investment firms Colony Capital and Woodridge Capital Partners bought the 49-acre resort in February 2014 for $142 million, PERE previously reported. The duo sold the property, which has 297 guest rooms and 107 condominiums, to a four-way JV comprising Ares Management, a publicly-traded Los Angeles-based alternative investment manager; SMW Hospitality, a partnership by New York-based investment manager Square Mile Capital Management and Wafra Investment Advisory Group, the investment arm of a Kuwaiti sovereign wealth fund; and Trinity Investments, a Honolulu, Hawaii-based private equity real estate firm.

Terms of the transaction were not disclosed, and the firms declined to comment on the acquisition. However, according to data provider Real Capital Analytics, the property traded for $172.5 million.

The new owners plan to renovate the hotel’s common areas and guest rooms, according to last week’s statement. Amenities at the luxury waterfront hotel, which was built in 1992, include restaurants, a spa and outdoor recreational activities such as snorkeling and sailing. The Ritz Carlton is part of the 23,000-acre Kapalua resort, which also includes properties owned by other parties, such as the Kapalua Villas, Montage Kapalua Bay and two 18-hole golf courses that host the annual PGA Tour. 

“This acquisition of The Ritz-Carlton, Kapalua represents a significant opportunity to invest in one of Hawaii’s most highly-acclaimed resorts, and it fits squarely in our opportunistic strategy that focuses on development and redevelopment, with planned upgrades to further improve the guest experience for both leisure and group customers,” Andrew Holm, a managing director in Ares’ real estate group, said in the statement.

The purchase marks SMW Hospitality’s entrance into the Hawaiian market, while Ares has worked with Trinity on investments in Hawaiian hospitality for over 20 years, according to the announcement.