Uncertainty surrounded the future of the St. Regis Princeville Resort after weekend media reports said it had been purchased by a Miami-based hotel investment company, but the company denied on Monday that it had done so.
The Garden Island reported last week that the Los Angeles County Employees Retirement Association was in negotiations to sell the St. Regis and Makai Golf Club, but the identity of the new owner remained undisclosed. LACERA has held the St. Regis in its real estate portfolio since the 1990s.
LACERA, which has been seeking a purchaser for the St. Regis for much of 2018, confirmed that a sale was at hand but declined to say who the buyer was. The hotel also confirmed a sale was impending, but refused to say who the purchaser was.
Over the weekend, Honolulu-based Pacific Business News reported that the St. Regis had been purchased by Starwood Capital, a Miami-based investment firm. Starwood Capital is not related to Starwood Hotels &Resorts, a subsidiary of Marriott International. Pacific Business News attributed its story to Real Estate Alert, a New Jersey-based online newsletter.
On Monday, however, the public relations firm that represents Starwood Capital denied that any purchase had closed.
“We have not purchased the property,” said Tom Johnson, CEO of the New York-based public relations agency that represents Starwood Capital.
“Beyond that, I cannot comment as we never comment on purchases we may or may not be reviewing.”
The statement suggested that Starwood Capital may still be considering the purchase. LACERA, which had previously confirmed that a purchase was in the works, did not respond to questions on Monday about whether Starwood was, in fact, a likely buyer or, if not, who might be.
Adding to the confusion, Starwood Capital was founded and is run by Barry Sternlicht, a veteran hotel executive who founded Starwood Capital in 1991. The company owned Starwood Hotels &Resorts until 2015, when it was purchased by Marriott International for $13.6 billion. Since that time, Starwood Capital has continued to pursue new hotel ventures separately and holds a broad real estate portfolio ranging from commercial properties to housing.
The weekend reports said Starwood Capital was buying the St. Regis for $225 million and planned to spend an additional $80 million on renovations and “rebranding” of the resort, which would be turned into a member of the firm’s 1 Hotels chain. The media accounts were silent on whether Starwood intended to continue operating the hotel during any transition or planned to shutter the resort until renovations and adopting the new brand identity are complete.
Starwood’s 1 Hotels brand has been on an acquisition spree, announcing openings of four new hotels this year and in 2019. The company already operates luxury hotels in New York City and Miami. Its expansion plan calls for new properties in West Hollywood, Calif.; Cabo San Lucas, Mexico; Sunnyvale, Calif.; and Sanya, China.
The website for 1 Hotels describes the four new projects in detail, but makes no mention of any involvement with the St. Regis.
Stephanie Reid, public relations spokesperson for the St. Regis, did not respond to requests for comment on the situation.
After Starwood Capital emerged as the potential buyer, a new wave of uncertainty swept through the workforce of the St. Regis. The hotel employs 600 people directly and supports numerous suppliers.
An investment consultant working with LACERA, who confirmed last week that a sale was near, did not respond to requests to confirm that the buyer is Starwood Capital.
LACERA has been in the process of divesting its hotel holdings to refocus its overall investment portfolio, so sale of the St. Regis has appeared to be consistent with this announced strategy.
For weeks, rumors have been rampant at the St. Regis that the hotel would be closed by its new buyer for extensive renovations. There had been no word from the hotel on whether hundreds of people will be put out of work by any change in ownership.
“We have no idea what’s happening,” said one long-time employee on Monday. “If they’re going to close down, we just hope there will be a severance package, so we are not left unemployed and destitute.”
The St. Regis has 252 rooms. Over the weekend, the St. Regis website continued to accept bookings through at least the first six months of 2019.
All I know is that the employees deserve better than this. They’ve had the sale of the property hanging over their heads for two years now. No answers about the future of their jobs. Working with that kind of uncertainty is very stressful especially for people supporting families. Hopefully this week they get some clear answers.