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Business

Lehman Bros. plans to sell Ritz-Carlton Kapalua resort

STAR-ADVERTISER
Lehman Brothers will put the Ritz-Carlton Kapalua hotel up for sale in the coming months, a source told Bloomberg News. In January Ritz-Carlton lost its interest in the nearby condominium and time-share.

Lehman Bros. Holdings Inc. plans to put its Ritz-Carlton Kapa­lua hotel on Maui on the market in the next few months as tourism across the islands reaches record levels.

Lehman, once the world’s fourth-largest investment bank, is looking for a broker to market the property, said a person with knowledge of the plan who asked not to be named because the information isn’t public. The company financed the resort before filing for bankruptcy in 2008 and gained control after foreclosing on the loan.

Ritz-Carlton was also a part owner and manager of a 146-unit resort condominium and time-share project in Kapalua next to the hotel, but lost its interest in the condo/time share as part of a foreclosure in January. The condo/time-share project formerly known as The Ritz-Carlton Club and Residences at Kapa­lua Bay is now known as The Residences at Kapa­lua Bay and is managed by Timbers Resorts.

Jeffrey Fitts, Lehman’s New York-based head of real estate and a managing director at Alvarez & Marsal, the advisory firm managing the liquidation, said in August that Lehman would only sell assets to repay creditors once the timing is right. It’s now preparing to trade the Ritz-Carlton Kapa­lua hotel as Hawaii benefits from a travel rebound that has sent tourism revenue to a record and prompted property investments across the state.

A Lehman spokes­woman declined comment.

A joint venture of New York-based Goldman Sachs Group Inc. and Gencom Group bought the Ritz-Carlton Kapa­lua in March 2006 and renovated the property before defaulting in April 2009 on a $260 million loan from Lehman. The Ritz-Carlton Kapa­lua hotel sits on 54 acres and has 463 guest rooms and suites. It also features six restaurants, a spa and two championship golf courses, according to its website.

Hotel occupancy in Hawaii was 77 percent last year, up from 73 percent in 2011, and average nightly rates climbed 7.5 percent to $204.86, according to Hendersonville, Tenn.-based research company STR. Both annual occupancy and rates were the highest in at least six years, according to STR.

Lodging revenue, including room rentals and food and retail sales, rose 15 percent to a record $3.62 billion last year through Sept. 30, according to Hono­lulu-based consulting firm Hospitality Advisors LLC. That’s compared with a low of $2.59 billion in the first nine months of 2009, when the U.S. was in a recession after the credit crisis.

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