Blackstone Group LP’s $450 million purchase of the leasehold interest in the Hyatt Regency Waikiki Beach Resort & Spa would expand the Hawaii portfolio of one of the isles’ largest hotel owners and could increase buyer interest in the state’s hospitality assets.

The pending transaction, first reported by Real Estate Alert, would double Blackstone’s holdings in Waikiki, the state’s top performing hotel market, which realized an average 89.1 percent occupancy rate during the first two months of this year and saw its average daily rate climb to $208.83.

The deal could be completed in July with Blackstone investing an added $80 million to upgrade the 1,230-room property, Bloomberg News reported. The 37-year-old Hyatt Regency includes three levels of retail space known as the Pualeilani Atrium Shops and restaurants.

Peter Rose, a spokesman for New York-based Blackstone, did not return a call from the Star-Advertiser.

Jerry Westenhaver, Hyatt Regency Waikiki Beach Resort & Spa general manager, said he could not confirm or deny any ownership changes. However, Westenhaver did say that if they occurred it would not affect property management.

"We have a long-term contract and we’ll be here way past the time that you and I are living for sure," he said. "We’ve talked to staff and made them aware that Hyatt is not going anywhere."

The resort’s potential new owner made its first big splash in Hawaii in 2005 with the purchase of two neighbor island properties, the Marriott Waikoloa Beach Resort and the Marriott Wailea Beach Resort. In July 2007, Blackstone significantly expanded its local interests with the $26 billion purchase of Hilton Hotels, which included the Hilton Hawaiian Village Waikiki Beach Resort, the state’s single-largest resort property and the Hilton Waikoloa Village. Given the strong hotel fundamentals in Waikiki, it’s a surprise to few that the private equity giant has now set its sights on the state’s top performing Hyatt, a well-positioned property on Kalakaua Avenue.

"There’s an incredible amount of interest in Hawaii right now," said Joe Toy, president and CEO of hotel consultancy Hospitality Advisors LLC. "The hotel investment market is very active. We saw some acceleration last year and it’s continuing. This should prove to be a very interesting year."

Toy said this latest Hyatt transaction, which works out to about $366,000 per room, is significant although it falls short of the state’s high-water mark, which was roughly $1.2 million per room for the Four Seasons Resort Hualalai on Hawaii island in 2006.

Still, the Hyatt sale is easily one of the largest transactions since the economic downturn and if it closes would bring even greater improvement to the state’s commercial real estate investment cycle, said Mike Hamasu, director of consulting and research at Colliers International.

"If it’s a legitimate deal and it … puts us on track to hit 2012 levels," Hamasu said, "my guess is that by the end of 2013, we’ll be at $2.4 billion or $2.5 billion" in commercial real estate sales.

While commercial real estate investment, including the heated-up hotel market, is well below the record $4.3 billion attained in 2006, Hamasu said savvy players like Blackstone bring additional credence to Hawaii investment.

"It’s positive that you’ve got this major player saying that they want a bigger share of the hotel rooms in Hawaii," he said. "The perception alone could bring greater appreciation to the state’s top-tier hotels."

To be sure, Unite Here Local 5, which represents union workers at the Hyatt Regency Waikiki Beach Resort & Spa, estimates that Blackstone already has interests in 5,738 hotel rooms in the state, outpacing the next largest owner Cerberus Capital Management/Kyo-ya Hotels & Resorts by more than 900 rooms. If Blackstone acquires the ground lease from majority owner Goldman Sachs Group Inc.’s Whitehall real estate funds unit and Hyatt Hotels Corp., part owner and property manager, it would add more than a thousand rooms to its major Hawaii hotel interests.

"That’s not necessarily a good thing for Hawaii," said Local 5 Spokesman Cade Watanabe. "The proliferation of private equity firms as hotel owners is negatively impacting hotel workers and the community. The trend concerns us whether it’s Blackstone, Goldman Sachs or Cerberus."

For instance, in the years after Goldman Sachs’ 2008 Hyatt purchase, the number of union workers dropped from about 550 to about 480, Watanabe said. About 100 union jobs also have been lost at Hilton Hawaiian Village since Blackstone’s 2007 arrival, he said.

"It’s all about maximizing profits," Watanabe said, adding that equity firms like Blackstone are known for "buying, tweaking and selling."