The iconic Kahala Hotel & Resort in Hawaii has been sold for a record breaking price to a Japanese investor.
The $300 million deal equates to a whopping $887,000 per room, the second highest in Hawaiian history and a record for an Oahu property.
The 338-room hotel has been snapped up by Resorttrust Inc. In a deal which is expected to close on September 30.
The hotel was formerly a landmark Hilton property and cost just $12 million to construct half a century ago.
It last underwent major renovation with a $52 million makeover in 2009.
The high price has raised eyebrows with analysts but also demonstrated the strength of the Hawaiian hospitality real estate market.
Joe Toy, CEO of Hospitality Advisors says a traditional ownership hotel model wouldn’t generate sufficient return on investment but the new owner will likely add the property to its time share portfolio.
Toy says Hawaii remains an attractive market with sales volume at a record $2.1 billion for the year.
A limited supply and a very robust average daily rate will continue to draw investment, he said.
Resorttrust’s COO Katsuyasu Ito said the property offers a "high-class resort hotel with an exceptionally high brand power."
Resorttrust plans to retain all employees along with current management company Landmark Hotels which has been operating the business since 2006.
The 50-year-old resort has a long history of hosting US Presidents, royalty and celebrity guests and its two-bedroom Imperial Suite sells for around $10,000 a night.
