Simone Investment buys $56 mn debt on Blackstone-owned Hawaii hotel

Simone Investment Managers Co. Ltd., a unit of a South Korean handbag maker, has invested around 60 billion won ($56 million) in a mezzanine debt on a Hawaiian hotel owned by the Blackstone Group, on behalf of South Korean institutional investors.

Citibank, which provided a loan to fund Blackstone’s acquisition of Turtle Bay Resort in the Hawaiian island of Oahu in 2017, split the loan into senior and mezzanine notes and sold down to institutional investors, including Simone Investment, according to a source with knowledge on the matter on March 27.

It was first reported by a South Korean news outlet, MoneyToday, last week.

Simone launched a domestic fund vehicle for the debt investment in early March, targeting an annual return of 6% or above.

The investment period is two years and can be extended by one year for up to five times.

Simone declined to identify the South Korean investors in the debt.

Blackstone reportedly paid approximately $330 million to buy the 452-room hotel from a consortium of international investment firms.

It was not immediately known how much the New York-based investment firm borrowed from Citibank to fund the acquisition.

The Turtle Bay Resort is the major hotel on the north shore of Oahu Island, and includes two golf courses, farmland and undeveloped land.

Its room occupancy rate is mid-80%, slightly above the average level of Hawaii hotels at the lower end of the 80% range, the source added.

Simone Investment, wholly owned by handbag and accessory manufacturer Simone Holdings, had invested $61.5 million in a mezzanine debt on The Bluffs at Playa Vista, a prime office building in Los Angeles, jointly with South Korean pension funds in December 2016, for a target return of about 5% per annum.

It also had acquired De Rotterdam, a landmark building in Rotterdam, the Netherlands, from Rabo Real Estate Group in June 2016.

Founded in 2014, Simone Investment focuses on global real estate and alternative assets at home and abroad.

By Daehun Kim

daepun@hankyung.com

Photo: Getty Images Bank