Investment giant Blackstone is preparing to offload a 1,300-acre Hawaiian resort on the north shore of O'ahu for a sizable profit after renovating it during the pandemic.
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Blackstone Real Estate has reached an agreement to sell the 450-room, Turtle Bay Resort to Host Hotels and Resorts, the largest publicly traded lodging REIT. The sale is expected to close in the third quarter of this year.
The two companies announced the deal in separate press releases that had different purchase prices. Blackstone's said $725M, while Host's said $680M.
Either way, it would be more than double the $332M that Blackstone paid when it purchased the property in 2018. Blackstone invested “significant capital” in renovations to most guest-facing aspects of the property between March 2020 and June 2021, a time when it was shuttered.
“This transaction is an excellent outcome for our investors and a testament to Blackstone’s ability, including through the pandemic, to transform iconic, luxury hospitality assets,” Head of Blackstone Real Estate Asset Management Americas Rob Harper said.
Host said the purchase price allocation is expected to be $630M for the resort and $50M for a 49-acre parcel of land entitled for development, subject to final appraisal.
The hotel REIT plans to change the property's brand to Ritz-Carlton and transition management to Marriott.
“We are thrilled to enter into an agreement to acquire Turtle Bay Resort, which will further expand and diversify our already strong presence in Hawaii,” Host Hotels President and CEO James Risoleo said in a statement.
Of the property’s 450 rooms, 42 are bungalows with beach access and a separate check-in and pool. The hotel also boasts an 18K SF indoor meeting space, six food and beverage locations, seven retail spaces, a spa, a fitness center, two golf courses, seven beaches, four pools and tennis and pickleball courts, as well as an equestrian center and a working farm.
In a separate transaction, Blackstone said it sold 65 acres to Turtle Bay Areté Collective, a developer known for its sustainability practices, bringing Blackstone’s total proceeds to $768M.
Blackstone’s sale comes less than a fortnight after it closed the sale of a 705-room hotel in Phoenix. London-based Henderson Park paid $705M for Arizona Biltmore, which dates back to 1929.
In January 2023, Blackstone's BREIT unloaded its 49.9% stake in MGM Grand Las Vegas and Mandalay Bay Resort for $1.3B, resulting in a $430.4M gain.
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