Blackstone Said to Have $200 Million Profit in Hawaii Deal

  • Hyatt Waikiki Beach resort to sell to Mirae for $780 million
  • Purchase latest in South Korean firm’s property buying spree

Blackstone Group LP agreed to sell the leasehold on the Hyatt Regency Waikiki Beach Resort and Spa to Mirae Asset Global Investments Co. for $780 million, garnering a profit of more than $200 million in three years, according to a person with knowledge of the pending transaction.

The 1,230-room property on the Hawaiian island of Oahu is the latest in a series of overseas real estate purchases by closely held Mirae. Last year, the South Korean company bought the Fairmont Orchid hotel on the big island of Hawaii and the Fairmont San Francisco, according to research firm Real Capital Analytics Inc.

Mirae declined to comment in an e-mail. Paula Chirhart, a Blackstone spokeswoman, declined to comment.

Blackstone is capitalizing on strong demand for lodging and little new supply in Oahu, the second-priciest lodging market in the U.S., after San Francisco. Oahu room rates averaged $217 a night in January through April, compared with $229 for the San Francisco-San Mateo market, according to lodging-data provider STR.

The Hyatt Regency Waikiki Beach would be the biggest single-property hotel transaction ever in Hawaii, according to Real Capital. The resort has been running at about 90 percent occupancy this year, with average room rates topping $250 a night, said the person with knowledge of the deal, who asked not to be identified because the sale is private.

Property Renovated

Blackstone, based in New York, bought the Hyatt Regency Waikiki Beach for about $450 million in 2013 and spent about $100 million to upgrade the rooms and retail at the property. The firm bought the hotel from the Whitehall real estate funds unit of Goldman Sachs Group Inc., with a small stake sold by Hyatt Hotels Corp. Blackstone plans to return the proceeds from the sale to investors rather than recycling it into new hotel purchases, the person said.

Mirae spent about $1.2 billion on U.S. real estate last year, according to Real Capital. Besides the Fairmont hotels, its purchases included two office buildings in Washington.

Details of the sale were reported earlier by Korea Economic Daily.

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