Blackstone Real Estate Partners has acquired Maui, Hawaii-based The Ritz-Carlton, Kapalua, a oceanfront hotel. The seller was a joint venture among funds managed by Ares Management‘s real estate group, SMW Hospitality LLC (a joint venture between Square Mile Capital and Wafra Inc.) and Trinity Real Estate Investments LLC. No financial terms were disclosed.
Honolulu, Los Angeles & New York (October 16, 2018) – A joint venture among funds managed by the Real Estate Group of Ares Management, L.P. (NYSE:ARES), SMW Hospitality LLC (a joint venture between affiliates of Square Mile Capital Management LLC (“Square Mile Capital”) and Wafra Inc.), and Trinity Real Estate Investments LLC, today announced the sale of The Ritz-Carlton, Kapalua in Maui, Hawaii, to Blackstone Real Estate Partners, an affiliate of Blackstone Group (NYSE: BX).
The joint venture acquired The Ritz-Carlton, Kapalua, a AAA Five Diamond, oceanfront property located on 49 acres of Maui’s lush northwest shore, in 2016. Since then, the joint venture leveraged its hospitality and financial expertise to unlock significant embedded value at the property, including by implementing a capital improvement plan to renovate the hotel’s common areas and guest rooms, further enhancing the guest experience.
“The Ritz-Carlton, Kapalua was acquired at a compelling basis and had a clear redevelopment plan that was a strong fit for our opportunistic investment strategy,” said Andrew Holm, Partner in the Ares Real Estate Group. “We are proud of the work we did with our partners to further improve what was already an iconic Maui property.”
Senior Managing Director Nolan Hecht of Square Mile Capital said, “Consistent with Square Mile Capital’s core investment style, we were an early investor of institutional capital on Maui, anticipating a rapid acceleration of tourism that would benefit the local hotel market. Along with Ares, we saw an opportunity to buy this particular property at a discount two years ago and reposition it very profitably. Trinity proved to be a terrific local operating partner, and all together we executed the capital improvement plan successfully.”
“We believe the outcome of this transaction reflects the significant value we were able to create over the hold period,” said Sean Hehir, Managing Partner of Trinity Investments. “The deal is a perfect example of how we leverage our intimate local market knowledge and proven platform to generate compelling risk-adjusted returns on invested capital.”
The 297-key hotel, which includes 107 condos located within a dedicated wing known as the Residences, is part of the 23,000-acre master planned Kapalua resort on Maui, home to the celebrated Kapalua Wine and Food Festival and the PGA Tour’s Tournament of Champions event. The resort is renowned for its world-class golf courses, an award-winning tennis facility, golden sand beaches and myriad restaurants and shops.
About Ares Management, L.P.
Ares Management, L.P. is a publicly traded, leading global alternative asset manager with approximately $121.4 billion of assets under management as of June 30, 2018 and 18 offices in the United States, Europe, Asia and Australia. Since its inception in 1997, Ares has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares believes each of its three distinct but complementary investment groups in Credit, Private Equity and Real Estate is a market leader based on assets under management and investment performance. Ares was built upon the fundamental principle that each group benefits from being part of the greater whole. For more information, visit www.aresmgmt.com.
About Square Mile Capital Management, LLC
Square Mile Capital Management LLC is an integrated institutional real estate finance and investment management firm based in New York. Square Mile Capital’s large U.S. footprint, enhanced by the firm’s strategic partnership with USAA Real Estate Company, enables it to leverage proprietary market insights through a unified sourcing and investment philosophy that positions the firm to capitalize upon opportunities through all phases of the commercial real estate cycle. The firm’s opportunistic investment platform takes a value oriented approach to its activities, with an emphasis on opportunities to acquire or capitalize real estate assets or enterprises that are undervalued, complex or undercapitalized. Square Mile Capital’s commercial real estate debt platform provides customized capital solutions for real estate owners and developers throughout the United States. For more information, visit www.squaremilecapital.com.
About Trinity Real Estate Investments LLC
Trinity Real Estate Investments LLC is a private real estate investment firm with a 20-year history of generating value-added returns. Since its inception, Trinity Investments has consummated more than $4 billion worth of global real estate transactions in Hawaii, Mexico and Japan by leveraging its deep institutional knowledge and longstanding local relationships. With considerable expertise covering the full spectrum of property investment, development and value-enhancing asset management, Trinity Investments generates unique and opportunistic real estate investments in world-class markets. Based in Honolulu, Hawaii, the firm’s pursuits span an array of geographic locations and asset types but share the commonality of being predicated upon best-in-class local relationships and teams of professionals for sourcing, executing and realizing investments within each of its target markets. For more information, visit www.trinityinvestments.com.