The Kai Aloha Hotel, an 18-room boutique hotel next door to the Trump International Hotel Waikiki, has sold to investors from Japan for $8.1 million.
The buyer, Pineland Co. Ltd., is a real estate investment organization in Osaka, Japan, and the Waikiki property is its first investment in Hawaii, according to Steve Sombrero, president and owner of Cushman & Wakefield ChaneyBrooks, which represented the seller, Kai Aloha Ltd.
The seller was the family of the late En Harriet Chang, who ran the three-story hotel on Saratoga Road from the 1960s until her death in May 2019.
The hotel went on the market last spring, and marketing the property during the Covid-19 pandemic “presented unique challenges that required creative thinking and action,” listing broker Allen Yamaguchi said in a statement.
“For one, travel restrictions discouraged prospective offshore investors from flying to Hawaii unless they complied with the mandatory 14-day quarantine,” he said. “Imagine quarantining for 14 days to conduct a property inspection that could be completed in two or three days.”
Yamaguchi said detailed property presentations that addressed possible questions buyers might want to know, along with video conferences and virtual walk-throughs helped to circumnavigate the restrictions.
Sombrero noted that demand for commercial property in Hawaii is “stronger than ever before” and said his firm receives inquiries from investors on both sides of the Pacific. Some of those investors are looking for bargains in the Islands, where tourism has been severely impacted by the pandemic, on the assumption that hotels are severely distressed.
“In reality, there are no fire-sales to speak of in Hawaii,” Sombrero said. “Hotel owners and their lenders are holding their positions in anticipation of a quick and substantial recovery of our market. “After all, investors are investing in more than just hotels and properties. They are investing in the Hawaii Brand,” he said. “The sale of the Kai Aloha Hotel at the $450,000 per key price tag is a great testament of Hawaii’s strength. This was definitely not a fire-sale.”
The sale was also personal for Sombrero, who met Chang many years ago when he first started his business.
More than once he tried to convince her to sell the property and retire, and would often bring her malasadas and talk story.
“The fact that I was able to do it even after she passed away,” Sombrero told Pacific Business News. “I’m going to go visit her and put some flowers on her grave and say ‘I did it, Harriet.'”