Hawaiian Hotels Languish in Distress
Hawaii Business reports: Using data aggregated by Real Capital Analytics (RCA), Hawaii Business recently detailed the state of distress in the island state’s hotel market. Hawaii has one of the highest totals in the nation, with 12 properties representing over $2.0 billion in outstanding hotel distress. This is behind only Nevada, which has $8.4 billion in hotel distress, and ahead of both New York and New Jersey. RCA’s Ben Carlos Thypin remarked of this remarkable load of distress that, “Hawaii’s status is a function of the value and size hotels here, not because of the number of properties involved.” He added that he believes, “It will take years for the situation to resolve as owners, lenders, special servicing agents, receivers and lawyers huddle.”
A unique feature of Hawaiian hotels, of course, is that the majority of those in distress are luxurious resorts purchased at high loan-to-value ratios when pricing was at its peak in 2007. Hawaii Business stated that those buying these sprawling locations were anticipating high occupancy and being able to charge $300 per night for a rooms for the foreseeable future, thereby maintaining a steady operating revenue to service their debt load. When the recession hit in 2008 and unemployment rose, luxurious vacations to Hawaii fell off most people’s list of priorities. After a few months of reduced revenues, owners became delinquent on their debts.
The following is a list of significant hotel properties currently tagged as distressed in RCA’s record.
Grand Wailea Resort & Spa
Ritz Carlton Kapalua
Four Seasons Resort Maui
Fairmont Orchid
Turtle Bay Resort
Sheraton Keauhou Bay Resort
Ilikai Hotel
Aloha Beach Resort Kauai
Diamond Hawaii Resort & Spa
Hawaiiana Hotel
Queen Kapiolani Hotel
Kapalua Bay Renaissance Resort
For more information on distress in Hawaii, please see the full article on Hawaii Business’ site.
View the full article on Hawaii Business: Hawaiian Hotels Languish in Distress
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Posted by: Nina Turner