Guam
Hilton Sale Signals Upturn
U.S.-Japan Investor Group Buys Signature Guam Resort
| Two major announcements in November provide strong evidence that investment
dollars are once again heading into Guam's tourist industry and that the
island is on its way to economic recovery. Hilton Hotels, which owned the
Guam Hilton Resort and Spa, announced on Nov. 17 that the 32-acre, 687-room
hotel had been sold to a U.S.-Japan backed investment firm, DaVinci-RP Hotel
Investors. The purchase price was a reported US$30 million and the debt
was placed with Japan's Aozora Bank, according to the Hotel & Motel Management
Website.
The new owners have committed to major reconstruction of the property. "We will also be carrying out soft renovations in our existing 587-room inventory," says General Manager Manfred Pieper. Renovations are scheduled to begin this year and reportedly will cost more than US$10 million. The Hilton group will continue to manage the property. - ADVERTISEMENT - Meanwhile, on Nov. 30, DFS announced that it planned to spend US$20 million renovating its flagship store in Guam's tourist district, the Galleria, beginning this month. "In the new store, you'll see a new emphasis on luxury and fashion brands and world-class displays of merchandise," says Joseph Camacho, DFS U.S. Group vice president.
The Hilton sale marks "the first time in 12 years for a Japanese bank to finance a major acquisition in Guam," says Nick Captain, Guam real estate consultant. A number of other major real estate transactions are in different stages of completion. "There are deals in escrow for major income-producing properties," says Captain. "If all the deals that are supposed to close by December 31 do so, the total dollar amount of the transactions will approximate the annual totals for the prior three years combined. It will blow them away." The prospect of owners bringing capital into Guam is a source of optimism throughout the financial community. "The Hilton sale gives us an understanding as to what the (real estate) values will be and it gives the marketplace an understanding that there is optimism about what happens in Guam," says Ron Leach, Bank of Hawaii's Guam-based executive vice president and Pacific Islands Division manager. "The Hilton selling is the first, there are many more to follow. It means that the Tumon Bay area will see a real nice renovation and rejuvenation of opportunities and good solid opportunities to see better-quality and higher-spending tourists coming to this marketplace."
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