There’s a new chief in town at Hilton’s Kauai Beach Resort. After many months of dialogue, and input from the condominium owners, Aqua Hotels and Resorts, a dynamic company based in Oahu, has taken over the management of the Hotel, removing Anekona management. Anekona was a company affiliated with the original developer, Anekona Development, and for the number of years where Anekona managed the hotel, there were difficulties amongst the homeowners. Once iStar, the large lender who foreclosed on 145 units in the complex that were never sold, got involved, it was clear that it was time for a change.
For many who desire to own oceanfront property on the island of Kauai, the Hilton Kauai Beach Resort is an excellent property. The resort contains several restaurants, lounges, an amazing pool complex complete with water slides and jacuzzis, and 350 fee simple condotel units. A condotel is simply a condominium with fee simple ownership that is created from a hotel room. Thus, the word “condo-tel”. The complex was renovated in 2005 and the rooms are modern and tastefully furnished with plantation shutter doors on the lanai, Tommy Bahama furniture, and wonderful views of the mountains, pool, and ocean from many of the rooms.
Unfortunately, in the boom market, the developers sold the first 205 units at prices ranging from $230,000 to almost $500,000 for several of the rooms along the oceanfront in Building Four. These prices always seemed like a stretch in terms of their ultimate value but the market was so buoyant it appeared that values would continue to go up. From a point of view of ROI or cash flow, the units need to be less expensive to make financial sense. Well, now they are, and this year’s sales reflect the adjustment.
Kauai Beach Resort 2009 sales-to-date
So with the optimism of new management and a tourism industry that seems to be stabilizing, the opportunities at the Hilton Kauai Beach Resort are excellent for today’s buyers. One caveat however: due to changes in today’s lending guidelines, these will need to be cash purchases until further notice. But consider this… Unit 4111 sold for $105,555 in March. The unit netted close to $30,000 before HOA fee’s and taxes based on last year’s statements from the prior management company. After paying taxes and maintenance fees, the unit would still have netted over 15k. That’s a very respectable number by anyone’s standards. These numbers will ebb and flow and different units generate different levels of income. But the good news is, the market has adjusted and buyer’s have a good opportunity at one of Kauai’s east side ocean side resorts.
Questions? Contact me directly about this project or any condominium on the Garden Island.