New York Life Provides $136M Refi for Hawaii’s Fairmont Orchid Hotel

Mirae Asset Global Investments, a South Korean asset management firm, has secured a $136 million loan to refinance Fairmont Orchid, a 540-key luxury hotel on the Big Island of Hawaii, according to an announcement from JLL.  

New York Life Real Estate Investors (NYLREI) provided the five-year, fixed-rate loan, while JLL’s hotels and hospitality team of Kevin Davis, Mike Huth, Maddie Blount and Jade Lewin arranged the financing. 

In a statement, James Nearon, senior director of NYLREI’s West Coast originations, described the Fairmont Orchid in a statement as “a premier, luxury, full-service resort,” and praised the current ownership of Mirae Asset Global Investments, which plans to complete the first phase of a multiyear, $110 million renovation of the hotel later this year. 

“The strong sponsorship of Mirae Asset Global Investments and attractive market fundamentals made this a compelling opportunity that fits nicely within our broader lending strategy,” added Nearon. 

Located at 1 North Kaniku Drive in the city of Waimea, the Fairmont Orchid opened in 1990 on nearly 33 acres along the famed Kohala Coast, known for its golf courses and resorts. Amenities at the hotel include a 10,000-square-foot oceanfront pool, a spa and fitness center, seven on-site restaurants and 10 tennis courts. The hotel also sits along the beach of Pauoa Bay and features 108,000 square feet meeting space for events. 

Location is everything in hospitality, and especially so in destination travel. The Fairmont is within the 3,200-acre Mauna Lani Resort community, a residential and hospitality district on the Big Island that was once the ancestral beachfront home of old Hawaiian royalty. The Fairmont Orchid is also near Kona International Airport, Akaka Falls National Park, Mauna Loa Forest Reserve and Hawaii Volcanoes National Park.

JLL’s Davis said in a statement that the new financing reflects the “strength and resilience” of Hawaii’s luxury hospitality industry and praised the hotel’s attributes. 

“The Fairmont Orchid’s prime oceanfront location, strong cash flow and recent renovations generated significant lender interest,” said Davis. 

Fairmont Orchid has gone through a few changes of ownership in the last two decades. Westbrook Partners bought the hotel from Fairmont Hotels & Resorts for $250 million in 2005, but needed to give it back to its lender, Barclays Capital, in a deed in lieu of foreclosure soon thereafter, according to the Pacific Business Journal.

Oaktree Capital Management and Woodbridge Capital Partners then purchased the hotel in 2011, and sold it to Mirae Asset Global Investments four years later for $200.3 million. 

Brian Pascus can be located at bpascus@commercialobserver.com