Ares US Real Estate Opportunity Fund III
Ritz-Carlton, Kapalua (Realized)
Acquisition of a full-service hotel and branded condominiums totaling 398 units in Maui, HI*
a
Lahaina Roads
Napili Honokowai
Kaanapali
Lahaina
Olowalu
Kaho'olawe
(340
Waihee-Waiehu)
Kahului
(30)
380)
Maalaea
311
(310)
Kihel
(36)
37
Wailea Makenal
Paia
Haiku-Pauwela
Makawao
Maul
Red Hill
Haleakala
(360
Confidential - Not for Publication or Distribution
Ke Anae
Koolau Forest Nahiku
Reserve
360
Haleakalā
National Park.
Kaupo (160)
Hana
REFIK
Investment Date:
Location:
Investment Theme:
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Trophy Asset with Irreplaceable Beachfront Location
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Key Metrics
Equity Committed: (10)
Maui, HI Realized Gross IRR/EM:(2)
Renovate Property and Improve Operations
Investment Rationale & Key Drivers of Return
Nov-2016
Purchase at Deep Discount to Replacement Cost
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Rapid-Growth Submarket in
Major Metro
Attractive Supply/Demand Fundamentals
Rare fee-simple acquisition opportunity of an oceanfront, Ritz Carlton-
branded hotel and residences spanning 49 oceanfront acres
54
$36.1 million
45% / 2.0x
Ares' all-in basis represented a ~40% discount to the 1992 development cost
and ~60% discount to the 2008 owner's basis
Maui is an extremely supply-constrained market given the high barriers to
entry, while visitation statistics have consistently grown
Investment Outcome
Implemented a nearly $20 million capital program focused on rooms, F&B areas, the
pool, and common spaces, many of which hadn't been renovated since 2008
Past performance is not indicative of future results. Please refer to full AREOF II track record on page 58, and notes on page 50 and endnotes starting on page 65.
*Reflects 297 hotel keys as well as the additional 64 condominium units at the resort that were acquired which lock-off to create an additional 101 keys, totaling 398 keys.
Actively asset managed the property in order to improve top-line revenue while
enhancing operating efficiencies
Increased NOI from approximately $8 million at acquisition to $15 million at exit
In Q4 2018, Ares sold the hotel for a gross purchase price of $275 million, which
generated a 45% gross IRR and 2.0x gross EM (2)
ARESView entire presentation