Bloomberg News

Lehman Said to Plan Maui Hotel Sale on Travel Rebound

March 05, 2013

Lehman Brothers Holdings Inc. plans to put its Ritz-Carlton Kapalua resort in Hawaii on the market in the next few months as tourism across the islands reaches record levels.

Lehman, once the world’s fourth largest investment bank, is looking for a broker to market the property, said a person with knowledge of the plan who asked not to be named because the information isn’t public. The company financed the resort before filing for bankruptcy in 2008 and gained control after foreclosing on the loan.

Jeffrey Fitts, Lehman’s New York-based head of real estate and a managing director at Alvarez & Marsal, the advisory firm managing the liquidation, said in August that the firm would only sell assets to repay creditors once the timing is right. It’s now preparing to trade the luxury Maui resort as Hawaii benefits from a travel rebound that’s sent tourism revenue to a record and prompted property investments across the islands.

A Lehman spokeswoman declined to comment on the planned sale.

A joint venture of New York-based Goldman Sachs Group Inc. and Gencom Group bought the Ritz-Carlton Kapalua in March 2006 and renovated the property before defaulting in April 2009 on a $260 million loan from Lehman. The Ritz-Carlton Kapalua sits on 54 acres and has 463 guest rooms and suites. It also features six restaurants, a spa and two championship golf courses, according to its website.

Occupancy Rates

Hotel occupancy in Hawaii was 77 percent last year up from 73 percent in 2011 and average nightly rates climbed 7.5 percent to $204.86, according to Hendersonville, Tennessee-based research company STR. Both, annual occupancy and rates, were the highest in at least six years, according to STR.

Lodging revenue, including room rentals and food and retail sales, rose 15 percent to a record $3.62 billion last year through Sept. 30, according to Honolulu-based consulting firm Hospitality Advisors LLC. That’s compared with a low of $2.59 billion in the first nine months of 2009, when the U.S. was in a recession after the credit crisis.

To contact the reporters on this story: Heather Perlberg in New York at hperlberg@bloomberg.net; Nadja Brandt in Los Angeles at nbrandt@bloomberg.net

To contact the editors responsible for this story: Kara Wetzel at kwetzel@bloomberg.net Rob Urban at robprag@bloomberg.net;


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