|By Andrew Gomes, The Honolulu
AdvertiserMcClatchy-Tribune Regional News
Feb. 25, 2010--Trump International Hotel Waikiki Beach Walk has been open since November, but a problem tied to financing the more than $400 million project has kept 361 of the hotel-condominium's 462 units out of use.
The tie-up has upset the debut of the ultra-luxury property, severly limiting occupancy and frustrating some investors who in late 2006 purchased all the Trump Waikiki units for roughly $700 million, or $1.5 million each, on average.
Project officials say the trouble is close to being resolved, and that the building and its services have exceeded guest and owner expectations despite abbreviated operations.
The financing issue prevented most buyers from completing their purchases and taking ownership of their unit or units.
Scott Ingwers, Trump Waikiki managing director, said buyers should be able to complete their purchases starting next month.
Officials with project developer Irongate Capital and management partner Trump Hotel Collection would not reveal details of the problem, but said generally it has to do with parties that financed the project.
"It's an internal matter with the financing of the building," Ingwers said. "We look forward to growing the hotel once (sale) closings re-commence. It's moving forward. We're very close."
Financing for Trump Waikiki was spread among several entities. Equity investors included global investment firm D.E. Shaw & Co., New York-based investment fund Dune Real Estate Funds, and an investment company formed by Australian businessman Solomon Lew. Irongate and the equity investors obtained a $442 million construction loan from a unit of Germany's Hypo Real Estate Holding.
Hypo struggled during the global financial crisis and needed a $69 billion bailout from the German government. The rescue was made in 2008 while Trump Tower was still under construction, though Trump Waikiki officials at the time said the lender's troubles wouldn't impede construction.
The tower opened Nov. 16. But relatively few unit owners were able to stay in their units or make them available for visitors in the property's hotel rental program.
Only 101 buyers were allowed to complete their sales, and of those, about 80 elected to include their units in the hotel rental program. Other sale closings were suspended, and no sales have closed since late November.
A gala grand opening initially scheduled for January was postponed until this spring.
Ingwers said the sale suspension has nothing to do with two lawsuits filed last year by a few buyers who claimed they were misled about terms of the hotel management deal or Donald Trump's involvement in the project.
Many from japan
Ingwers also said buyers, all of whom made 20 percent nonrefundable deposits when they agreed to purchases, generally have been willing and able to complete their purchases despite mortgage lending that has become much more restrictive since sales contracts were signed.
According to property records, most of the buyers who closed are from Japan, where many of the units were sold in a targeted marketing effort.
Ingwers said sale closings didn't occur in a preferential order, and that the sales completed represent a diverse cross-section of units in the 38-story tower.
The developer has asked buyers for their patience, and expects most suspended sales will be completed in March and April, Ingwers said.
California-based Irongate, in a statement, said it is thrilled that closings will resume.
Ingwers said he expects that when sales resume and business builds for the hotel, the base of visitors coming to WaikÄ«kÄ« will be broadened.
"It's not like adding another hotel, it's adding a new product," he said. "We like to think we're providing diversity that is attracting a new market to WaikÄ«kÄ«."
New York real estate magnate Donald Trump's Trump Hotel Collection manages the property.
Units range from studios to three-bedroom living spaces with Italian marble in every bathroom and high-end appliances in kitchens. Some units have custom furnishings and laundry rooms. Penthouses feature rooftop lanais, and duplex units span two floors.
A hip urban steakhouse, BLT Steak, is open on the ground floor. And an ocean-view bar and cafe called Wai'olu is operating in the sixth-floor lobby, serving breakfast, lunch and dinner.
However, the opening of In-Yo restaurant, featuring Italian and Japanese cuisine for dinner and American and Japanese cuisine for breakfast and lunch, was deferred until hotel occupancy reaches a critical mass. Ingwers said In-Yo will likely open in the spring, initially serving dinner.
Reach Andrew Gomes at firstname.lastname@example.org.
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