Kauai Hilton Resort Goes to Auction

Posted on April 13, 2009. Filed under: Kauai Foreclosure, Kauai Great Value Properties, Kauai Real Estate Auctions, Lihue Foreclosures |

This week the Pacific Business Journal reported about the upcoming auction of the remaining units owned by Brian Anderson and company at the luxurious property which is operated as the Hilton Kauai Beach Resort. This sale will represent the largest number of Kauai Foreclosure units sold to date. This property was formerly a Radisson Hotel. It was purchased by Anderson and Co. in 2004 for $62 million and the 350 hotel rooms were totally renovated. The grounds and amenities were also upgraded. After going through the condominization process, the 350 rooms were put up for sale in 2005. Over the next roughly three years, 205 of these condotel units were sold. The remaining units were not. Now, notice of the auction has been appearing in both the Kauai and Honolulu papers. The 145 condominium hotel units and 15 commercial condominium units will be sold in bulk at the May 6 auction at the entrance to 5th Circuit Court in Lihue, according to an advertisement placed by commissioner George Van Buren.

The New York lender, iStar Financial , filed for foreclosure on the property on July 22, 2008, claiming Anderson and his KB Resort LLC were in default of nearly $29.5 million in unpaid principal, interest, late charges and fees.

The amount was what remained from an original loan of $85.75 million — $75.75 million borrowed from subprime lender Fremont Investment & Loan on Dec. 7, 2005, and $10 million advanced in July 2006, according to the complaint. In June 2007, iStar took over the loans after it acquired Fremont’s commercial real estate lending business.

Aerial View above the Hilton Kauai Beach Resort

Aerial View above the Hilton Kauai Beach Resort

Developer Anderson had said last year that the 145 units now up for auction had been in escrow to an unnamed single buyer. So, come on down to the courthouse steps or tell your developer friends if you are looking for a good deal in a Kauai Foreclosure.
Download the kbr-floor-plan
The foreclosure notice states that all 145 rooms and 16 commercial units ( those are the shops, store, restaurants,etc.) will be sold in bulk. The property has been operating successfully for several years. If you were to walk in the lobby, and dine at the restaurant, or attend South Pacific ( which runs in the ballroom each Wednesday night) you’d have no idea of any problems existing at the facility.

The condotel units sold from around 225,000 to as high as $500,000 when they came on the market in 2005. The recent comparables have sold for  around 100-150 thousand per unit. With high occupancy, the units at the KBR have the potential to generate a positive cash flow.

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