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What does the Mauna Kea Resort Cerberus acquisition mean to YOU?

“Late last year, a New York investment firm, Cerberus Capital Management LLP, bought a 30 percent stake in Seibu (both the Mauna Kea Beach and Hapuna Beach Hotels). The ownership of the company is entangled in various legal challenges and accusations of fraud in Japan and may complicate any effort to sell its assets quickly”. - Pacific Business News 2/12/06

I must assume that when you are from NYC and you name your investment fund Cerberus, the three-headed dog that guards the gates of Hell, you play hardball.

So if you play hardball why would you buy a minority stake in something that is not being run well? You wouldn’t…. unless you had a pre-existing right to buy a majority stake, take control, fix the problems, and eventually make a profit.

That is what I envision. You take the fabulously designed Trent Jones course and give it a re-do, take the food and beverage up 5 notches so it gives Hualalai and Kukio a run for the money and you turn the 350 room Mauna Kea Beach Hotel into 75-100 ultra-luxury condominiums.

You run it like an Aman Resort, selling the condos and retaining the right to use them in a hotel pool of some sort. You get your money out of the deal, hey and even make a buck or two, and then you operate with a minimal capital outlay.

And at the end of the day what do you end up with?

• The Best Hotel (all suites)
• The Best Beach (hands down)
• The Best Tennis Facility (right on the ocean)
• The Most Mature Landscaping (you can’t plant 50 year old trees)
• Great Golf (with a little bit o’ luck……private)
• The Lowest Density below the highway (108 residences, lots and condos less than half of most other resorts)

How will this affect property values?

Mauna Kea is the most under-valued Resort in Hawaii.

It has nowhere to go but up.

I used to say if Howard Johnson’s bought Mauna Kea, property values would go up 20%.

My bet is Cerberus will do a better job.

- Contact Ric Rocker to find the Mauna Kea Real Estate home that is right for you.