Tuesday, July 25, 2006


$370M Construction Financing Closes for Maui Timeshare Resort

Kapalua Bay L.L.C., an entity of Maui Land & Pineapple Co. Inc., has secured a $370 million construction loan from Lehman Brothers Holdings L.L.C. for the development of a new luxury residential condominium and fractional ownership / timeshare property at the 23,000-acre master-planned Kapalua Resort community in West Maui. Maui Land, which owns the 24-acre waterfront property on which the project will be developed, is collaborating with the Ritz-Carlton Hotel Co. L.L.C. and Exclusive Resorts to realize the endeavor.

The Kapalua Bay project will consist of The Ritz-Carlton Club Kapalua Bay, the timeshare portion of the development that will offer 62 fractional ownership residences, and the 84-unit The Residences at Kapalua Bay condominium segment.

“There’s such a high demand for fractional ownership and timeshare properties, and this will be the first one in the state,” Hospitality Advisors L.L.C. president Joseph Toy told CPN. “With regard to resort condominiums, there are signs that we may be reaching an oversupply. I think the Ritz property is better positioned for fractional ownership and the condominium segment may be able to benefit from that.”

With the closing of the financing deal, Lehman extended Kapalua Bay L.L.C. a $40 million advance to cover pre-development expenses, and provided the borrower with the option of accepting a second advance of $45 million after building permits for the project have been issued; the advances do not require a minimum amount of residential unit sales.

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