Japanese holding company invests in Hawaiian hotels

The holding company for Japan’s second-largest bank will help finance four Hawaiian hotels owned by Kyo-ya Hotels & Resorts—to the tune of $1.3 billion.

These hotels include the Sheraton Waikiki; the Moana Surfrider, a Westin Resort & Spa; The Royal Hawaiian, a Luxury Collection Resort; and the Sheraton Maui Resort & Spa. The four properties combined have a total of 3,461 rooms.

The Sumitomo Mitsui Financial Group deal indicates that offshore lenders are likely to provide "ample liquidity" for hotel transactions in Hawaii for the immediate future, CBRE Hawaii said. In a report, CBRE found that the loan is roughly equal to the allocated acquisition price for the same hotels two years ago.


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CBRE's report called the loan proceeds "a telling indication of the underlying value appreciation that Sumitomo Mitsui has underwritten."

CBRE anticipates about $1.5 billion in hotel transactions to close this year, making 2016 potentially the most active since 2007.

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Growing interest in the lodging sector from institutional investors looking for steady returns has spurred an increase in ground-rent deals.

The operator, developer and investor has secured a loan through an environmental, social and governance financing structure for eco-friendly hotels.

The Kabani Hotel Group of Marcus & Millichap held its fourth annual investment forum and lunch in Miami late last month.