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Blackstone to build new timeshare at HHV

J

jsfletch

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Feb 27, 2014, 2:27pm HST
Blackstone plans new timeshare tower at Hilton Hawaiian Village in Waikiki
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Blackstone is purchasing land and entitlements from Hilton Worldwide for a new timeshare tower at the Hilton Hawaiian Village Waikiki Beach Resort that will be called the Grand Islander.


Stephanie Silverstein
Reporter-
Pacific Business News
Email | Twitter
Blackstone plans to build a 37-story, 418-unit timeshare tower in Hawaii on property it is buying from the Hilton Hawaiian Village in Waikiki, Hilton Worldwide announced Thursday during its first earnings call since going public in December.
Hilton representatives could not confirm whether Blackstone (NYSE: BX) is buying the entire Hilton Hawaiian Village property, or only the parcel of land at the corner of Kalia Road and Paoa Place, where the timeshare tower will be developed.
Christopher J. Nassetta, president and CEO of Hilton Worldwide (NYSE: HLT), said during the earnings call that the company recently entered into a transaction to sell land and entitlements it obtained over the last few years, which would create “significant incremental value from what has been a non-income producing part of the resort,” adding that it is a loading dock.
Executive Vice President and CFO Kevin Jacobs said the company recently made a purchase and sale agreement with a Blackstone-led partnership with third party capital investors for the sale of land and entitlement rights in connection with the planned timeshare. He added it will be called the Grand Islander.
Blackstone recently registered BRE Grand Islander LLC as a new business with the state Department of Commerce and Consumer Affairs.
Hilton had been planning to build the timeshare tower as the first phase of its master redevelopment plan.
Stephanie Silverstein covers tourism, retail and money for Pacific Business News.
Next Article: Maui resort acquired by California investors
 
Blackstone buys the land from Hilton, blackstone develops it, then (even though it doesn't explicitly say it) HGVC manages it. Sounds like the asset lite model that Wyndham is using.

Ian
 
I thought there had been plans for one or two more timeshare buildings at HHV anyway.
 
Those plans got canned, there were to be two or three towers. This is the only one going forward, it will be over the transit center in the back corner of the property next to Hale Koa.
 
SmithOp said:
Those plans got canned, there were to be two or three towers. This is the only one going forward, it will be over the transit center in the back corner of the property next to Hale Koa.
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This is my understanding as well -- the master redevelopment was going to build two new timeshares. One over the bus depot (this one -- that Blackstone is going to develop) and one over the rainbow bazaar.

They told me last week when we were there that the one of the rainbow bazaar was on indefinite hold. I'm happy to see them proceeding with the bus depot one.

Thanks for posting this!

Best,

Greg
 
Would it be safe to assume that there is currently no tower construction going on at the HHV at the moment? I'll be there in about six weeks, and no construction noise would be a blessing.
 
AlohaAmbassador said:
Would it be safe to assume that there is currently no tower construction going on at the HHV at the moment? I'll be there in about six weeks, and no construction noise would be a blessing.
Click to expand...

We were there last week and there was no construction.
 
AlohaAmbassador said:
Would it be safe to assume that there is currently no tower construction going on at the HHV at the moment? I'll be there in about six weeks, and no construction noise would be a blessing.
Click to expand...

Lol, you just reminded me why I took a break from using my home Lagoon unit, they were building Grand Waikikian, so we went over to Bay Club and ended up buying a Kingsland unit pre-construction DOH!

This construction should not affect the timeshare units, it's on the opposite side of the resort next to a hotel tower.

7 weeks and we are off to Maui and Big Island, Aloha!
 
As crowded as HHV is already, I'm sorry they're building ANY more towers, but at least it's just one instead of the two as previously planned.
 
Doesn't Blackstone Own Hilton?

PassionForTravel said:
Blackstone buys the land from Hilton, blackstone develops it, then (even though it doesn't explicitly say it) HGVC manages it. Sounds like the asset lite model that Wyndham is using.

Ian
Click to expand...

I thought that Blackstone owned Hilton. If they do then Hilton can build the timeshare for Blackstone. If they don't then they are buying something they already own and building on it, and then having Hilton, which they already own,
operate it. This sounds like double-talk and really not any news that effects me.

What I really am interested in is how much are the timeshares resale, how much are the maintenance fees, and what is the availability to reserve. The rest of the crap is just the capitalistic system doing its thing.
 
AlohaAmbassador said:
Would it be safe to assume that there is currently no tower construction going on at the HHV at the moment? I'll be there in about six weeks, and no construction noise would be a blessing.
Click to expand...

We're here at HHV right now. No major construction, as in big construction vehicles. But they're busy constructing the new transportation center as we speak. They're building a bunch of indoor kiosks in the indoor mall section of Tapa Tower. But it's all individual carpentry type of stuff. Lots of hammering and power saws, but no construction vehicles. It was a heck of a racket while I was trying to rent a car for the day from the National Car kiosk in Tapa, though.

feed the otter said:
As crowded as HHV is already, I'm sorry they're building ANY more towers, but at least it's just one instead of the two as previously planned.
Click to expand...

+1.

-Bob
 
Tamaradarann said:
I thought that Blackstone owned Hilton.
Click to expand...

Hilton is now a publically-traded company (again), although Blackstone still pulls the strings.

An analysis from Quartz.com...

What makes Hilton similar to a tech company isn’t its business but its ownership structure. Both are owned by a small group of private investors (founders and venture capitalists for the tech firms, a private equity fund in Hilton’s case). These owners aren’t going public to raise capital; they are going public to cash out.

Existing owners—like Blackstone, which will retain the bulk of Hilton—then benefit from the higher share price, but don’t dilute their holdings. Tech firms, similarly, tend to keep their public offerings small so as to get a share-price “pop” without diluting the early-stage investors who got them started.

Selling so few shares in Hilton means Blackstone won’t bring in as much capital as it could have, but capital isn’t the goal. The goal is to help bolster Blackstone’s eventual return on a company that it probably overpaid for in the first place.

Hilton was purchased in 2007 for $26 billion, including $6 billion of Blackstone’s own money, when the market valued it around $18.5 billion. The hotel chain became an albatross around the firm’s neck as the housing bubble dinged commercial real estate and the recession killed business travel. Even now that the chain has rebounded and restructured away $4 billion of debt, a full sale wouldn’t come close to the epic returns Blackstone is used to.

Blackstone apparently values its hotel chain above its more exotic assets: When it took SeaWorld public earlier this year, it sold 28% of the existing stock.
 
So Blackstone is buying the HHV Property

Talent312 said:
Hilton is now a publically-traded company (again), although Blackstone still pulls the strings.

An analysis from Quartz.com...

What makes Hilton similar to a tech company isn’t its business but its ownership structure. Both are owned by a small group of private investors (founders and venture capitalists for the tech firms, a private equity fund in Hilton’s case). These owners aren’t going public to raise capital; they are going public to cash out.

Existing owners—like Blackstone, which will retain the bulk of Hilton—then benefit from the higher share price, but don’t dilute their holdings. Tech firms, similarly, tend to keep their public offerings small so as to get a share-price “pop” without diluting the early-stage investors who got them started.

Selling so few shares in Hilton means Blackstone won’t bring in as much capital as it could have, but capital isn’t the goal. The goal is to help bolster Blackstone’s eventual return on a company that it probably overpaid for in the first place.

Hilton was purchased in 2007 for $26 billion, including $6 billion of Blackstone’s own money, when the market valued it around $18.5 billion. The hotel chain became an albatross around the firm’s neck as the housing bubble dinged commercial real estate and the recession killed business travel. Even now that the chain has rebounded and restructured away $4 billion of debt, a full sale wouldn’t come close to the epic returns Blackstone is used to.

Blackstone apparently values its hotel chain above its more exotic assets: When it took SeaWorld public earlier this year, it sold 28% of the existing stock.
Click to expand...

So Blackstone is buying the HHV Property from Hilton which it mostly already owns. It will then build the timeshare property and sell shares to people who don't know about TUG. Then TUG members will be able to buy weeks there for 25-30% of the initial cost, or reserve time there with their existing ownership. While the initial part of the story does sound confusing, the final outcome is great.
 
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