Sad news for Hawaii from the Wall Street Journal: As announced in February, the former Maui Prince Hotel was sold at a foreclosure auction Friday to its mortgage holders for $55 million.
The hotel, renamed the Makena Beach & Golf Resort last year, sits on 1,800 acres on the southwestern coast of Maui. The property includes the 310-room resort, two golf courses and swaths of land for residential development. It was known as the Maui Prince Hotel when owned by Prince Resorts Hawaii, which sold it to the Morgan Stanley group in 2007 and stayed on as the property’s manager until last year.
The hotel became the target of foreclosure proceedings last summer when its previous owners missed payments on its $192.5 million mortgage. Friday’s auction puts the resort in the hands of those mortgage holders, represented by Wells Fargo Bank.
The auction represents a big loss for the resort’s former owners, Morgan Stanley Real Estate Fund V and developer Everett Dowling. The two bought the resort at the market’s peak in 2007 for $575 million, but could not refinance or pay the $192.5 million mortgage when it came due last July.
Friday’s auction wipes out the $227.5 million of mezzanine debt on the property held by a UBS AG fund and the $250 million in equity that Morgan Stanley and Dowling had put into it.
