The Yarmouth Group said it is acquiring the leasehold interest in the Maui resort from KBH Operations Limited Partnership, which filed for bankruptcy reorganization in December.
The sale price was not disclosed but many expect it to be much lower than what the hotel was valued at during the Japanese investment boom of the early 1990s.
The deal, which requires approval from federal bankruptcy court, will likely be completed by the end of August, the company said.
Yarmouth said it plans to hire the Halekulani Corp. to manage and help renovate the hotel. Halekulani is owner and manager of the Halekulani luxury hotel in Waikiki and the Waikiki Parc Hotel.
An attorney for KBH declined comment yesterday.
KBH, headed by Japan-based Kapalua Club Corp., listed assets of up to $99.9 million and debts of more than $100 million when it filed for Chapter 11 bankruptcy last year.
Most of the company's debts were to Japan-based Apollo Leasing Co., which financed KBH's $102 million acquisition of the hotel in June 1990.
The Yarmouth Group is a New York-based real estate adviser, which manages some $5 billion in properties worldwide.
The proposed deal is the latest involving Kapalua Bay Hotel since the owner put the resort up for sale about a year ago.
In April, a Los Angeles-based investment firm, Colony Capital Corp., backed out of a planned purchase of the hotel. Colony earlier this year acquired the Ritz-Carlton Mauna Lani after buying the hotel now known as the Hilton Waikoloa Village in 1993.
Bob Hastings, president of the real estate appraisal firm Hastings Conboy Braig & Associates, said the pending sale of the Kapalua Bay Hotel underscores an increased interest in Hawaii real estate by mainland institutional investors.
Besides the Colony and Yarmouth deals, mainland investor Leon Black's Apollo Advisors and Chicago-based Trinity Investments Trust L.L.C. are acquiring the mortgage to the $185 million Harbor Court downtown high-rise, while Los Angeles-based Oak Tree Capital Management purchased the mortgage for the 196-unit Waikiki Landmark luxury condo complex last year.
"You've got some very sophisticated heavy hitters who are picking up these properties at substantial discounts from their original costs or previous values during the bubble years," Hastings said.