Sale closings at the high-end condotel units continue after slowing during the recession
POSTED: 1:30 a.m. HST, Feb 16, 2011
LAST UPDATED: 12:01 a.m. HST, Feb 22, 2011
» An affiliate of California-based Irongate Capital developed, owns and sold units in the Trump International Hotel & Tower Waikiki Beach Walk condominium-hotel. Donald Trump business entities manage the hotel and license the Trump name to Irongate. The original article below says Irongate developed the Trump Waikiki in partnership with Donald Trump.
You might consider this the longest soft opening for a hotel in Hawaii history.
The Trump International Hotel Waikiki Beach Walk is declaring that it has reached a critical mass, with a large majority of rooms and suites in service more than a year after opening.
It's been a long, slow buildup for the ultraluxury property.
Some 316 units, or 68 percent of its 462 units, have been sold, and 285 are available for occupancy by hotel guests. The Trump hotel is a hotel-condominium, or condotel. With condotels the developer sells individual rooms to investors, most of whom typically opt to rent the units to visitors and split rental proceeds with a management firm.
"We've just recently grown to a size that is befitting the building," said Scott Ingwers, Trump Waikiki managing director.
Adding to the buildup was the last of three restaurants, In-Yo, which opened in December, and hotel staffing that was expanded from 170 to 205 in the last few months.
Yesterday, Ivanka Trump, a principal with the Trump Hotel Collection, which manages the Waikiki property, hosted an event with unit owners.
Ingwers said there will be no grand-opening celebration, as had previously been planned, considering the long struggle the hotel endured getting up to speed.
The recession deterred many buyers from completing purchases they agreed to in late 2006, said Jason Grosfeld, a principal with Irongate Capital, the California-based firm that developed Trump Waikiki in partnership with New York developer Donald Trump, Ivanka's father.
Buyers at the sales event four years ago committed to buy every Trump Waikiki unit for about $700 million, or $1.5 million per unit on average.
The holdup completing sales began about two weeks after the tower opened in November 2009, as only 101 buyers closed their deals.
Other buyers couldn't complete their purchases and take possession of their units, which severely restricted the number of units available for hotel use.
Initially, Trump Waikiki officials only vaguely said the problem was tied to project financing. Grosfeld more recently elaborated on the issue, saying limited mortgage options hindered some buyers, while the economic downturn deterred others from closing.
Sale closings resumed last May and have gradually continued.
In December and January the number of completed sales rose to their highest levels. Another 80 sales are in escrow headed for closing in the next few months.
"It was like people were coming out from under the rock of the recession," Grosfeld said.
At the same time, more lenders, including some local banks, are making mortgages on Trump Waikiki units. Irongate also set up a lending subsidiary last fall to help buyers finance their purchases.
"I think it worked out very well," Grosfeld said. "Things are going extremely well on the closing side."
On the occupancy side, about 90 percent of the units in the hotel rental program are filled with guests.
Still, several buyers to date failed to complete their purchases. In most of those cases, Irongate has reclaimed the units and is releasing them for sale.
Recently, Irongate put 12 such units on the market for more than original sale prices.
The units for sale range from $700,000 to about $4 million. To help generate interest for these units, Irongate is including a package of activities in the deal such as private yacht cruises, helicopter tours and surfing lessons.