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.