Ritz-Carlton Kapalua Facing Foreclosure

by Deidre Woollard (RSS feed)
Sep 7th 2010 at 10:01PM

Another Hawaiian hotel is facing foreclosure. The Wall Street Journal reports that the estate of the bankrupt securities firm Lehman Brothers Holdings Inc. is foreclosing on the luxurious Ritz-Carlton Kapalua resort in Kapalua, Maui. The 463-room resort completed an extensive $180 million transformation including the lavish Ritz-Carlton Spa, Kapalua, Maui with 15 treatment rooms. The resort has been owned since 2006 by a venture of Gencom Group and Goldman Sachs Group Inc.'s Whitehall Street Global Real Estate LP. The group has been in default on the $255 million mortgage and negotiations have been in progress for several months. Part of the issues was that the group planned to sell 107 condominiums to cover the cost of the renovations. When real estate came tumbling down they were able to sell less than a third of those condos and were unable to pay back the loan when it came due.

As the WSJ article points out, foreclosures and loan issues are becoming common for Hawaii hotels. Big resorts including the Four Seasons Maui, the 540-room Fairmont Orchid Hawaii and the 203-room Ilikai Hotel in Honolulu have all faced trouble. As is usually the case in these situations, the Ritz-Carlton Kapalua resort remains open for business. A bed and breakfast hotel package at the hotel starts at $349 per night.

Tags: hotels in trouble, ritz-carlton, Ritz-Carlton Kapalua

Filed under: Luxury Travel & Hotels

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Reader Comments (Page 1 of 1)

llatitude38 Sep 15th 2010 2:40PM

looking like the days of the mega resorts maybe coming to an end. this ritz was one of my favorites{of course all ritz"s are my favorites!}. with the size of the nut on some of the vegas resorts can they be far behind? it seems to me that when a resort is reduced to selling rooms as condo's or timeshares,the resulting effect is disaster for both the parties that that buy or invest and for the regions former beauty.,
as well as the local economy because short cuts are taken to reduce overhead expenses and keep hoa fees manageable, service becomes secondary thus lowering the former status of the former resort, for the most part it becomes a circus -circus type of atmosphere.. if the ritz should fail it will most certainly be missed. i am sure i am not the only one who has fine memories of this fabulous resort!