Four Seasons Hualalai Hotel Loan Sent to Special Servicer

A loan on the luxury Four Seasons Resort Hualalai, a joint venture of Rockpoint Group LLC and Michael Dell’s MSD Capital LP, was transferred to a special servicer because of maturity default, Fitch Ratings said.

The loan has a balance of $175.9 million, Fitch said today. Rockpoint and MSD, the investment firm started by the Dell Inc. founder and his family, bought the property in June 2006 for $503.7 million, according to Scott Pritchard, a director for structured finance at Fitch.

Special servicers negotiate with landlords on behalf of investors in commercial mortgage-backed securities. The resort’s owners are in talks with lenders and seeking a later maturity. The fourth and last extension on the loan expired on June 9, according to Fitch.

The borrowers “will continue to make interest payments on the mortgage during the discussions with lenders,” Patrick Fitzgerald, chief executive officer of the resort, said in an e-mailed statement. “We are confident that the discussions will lead to a multiyear extension of the maturity date.”

A tsunami triggered by the 9.0-magnitude earthquake in eastern Japan caused more than $10 million of damage to the hotel on March 11, 2011, primarily to landscaping. Losses from tsunami disruptions probably will be covered by insurance, Fitch said in its note. The 243-room, five-star property, on Hawaii’s Big Island, has a golf course, two outdoor swimming pools and three tennis courts, according to Fitch.

The original balance of the interest-only, floating-rate loan on the resort was $354.4 million, Pritchard said.

Occupancies at U.S. luxury hotels climbed to 72 percent this year through April from 70 percent a year earlier, according to Smith Travel Research, based in Hendersonville, Tennessee. That’s the highest among the seven lodging categories the firm monitors. On Oahu, the only Hawaiian region Smith Travel tracks, occupancies were 84 percent, the best performance among the top 25 U.S. markets.

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