PC: The Ritz-Carlton Residences, Kapalua

A joint venture among funds managed by the Real Estate Group of Ares Management, SMW Hospitality LLC and Trinity Real Estate Investments LLC, announced the sale of The Ritz-Carlton, Kapalua on Maui to Blackstone Real Estate Partners.

The joint venture acquired the 49 acre property along the northwest shore in 2016. Since then, it leveraged its hospitality and financial expertise to unlock embedded value at the AAA Five Diamond property, including by implementing a capital improvement plan to renovate the hotel’s common areas and guest rooms.

The sale was announced in mid-October for an undisclosed price.

“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 466-room 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 Kapalua Wine and Food Festival and the PGA Tour’s Tournament of Champions event.