The Blackstone Group has agreed to sell the leasehold on a Hawaiian hotel to Korea’s Mirae Asset Global Investments for $780 million after buying the property three years ago.
The New York-based private equity giant purchased the 40-story Hyatt Regency Waikiki Beach in July 2013 for $450 million from Goldman Sachs and Hyatt Hotels, according to real estate data provider Real Capital Analytics (RCA). The firm then spent about $100 million to upgrade the 1,230-room hotel, which was built in 1976, according to RCA. Blackstone netted a profit of more than $200 million and plans to return the profit from the sale to investors, according to Bloomberg. PERE understands that after the sale closes, the private equity firm will not retain any stake in the property.
The Korea Times first reported the transaction on Thursday. According to the newspaper’s article, Mirae, based in Seoul, plans to pay $380 million through its affiliates and fund investors and source the remaining $400 million from bank loans.
The transaction marks Hawaii’s biggest single property deal, according to RCA. The hotel, which includes amenities such as a spa, restaurant and 19,500 square feet of event space, has about a 90 percent occupancy rate this year, Bloomberg reported.
Blackstone’s most recent transaction in Hawaii before this sale was the January 2015 disposition of the Waikoloa Beach Marriott, which it purchased in February 2005 for $57 million, according to RCA. The private equity firm sold the 545-room hotel in February 2015 to a joint venture comprising Mariner Real Estate Management, Silverwest Hotel Partners and Global Endowment Management for $79 million, according to RCA.
The Hyatt Regency Waikiki is Mirae’s second Hawaiian purchase after the financial services firm bought the Fairmont Orchid in May 2015 for $225 million from Oaktree Capital Management and Woodridge Capital Partners, according to RCA. In November, Mirae bought the Fairmont San Francisco, a 591-room luxury hotel, for $450 million, according to RCA.