HONOLULU & LOS ANGELES & NEW YORK—October 17, 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.