A fund tied to Michael Dell just dropped $400 million to buy the land under the Four Seasons Hualālai on the Big Island. He already owned the hotel, but the land was held by the Kamehameha Schools (KS) Trust.
We’ve been talking about leaseholds lately, and this one’s a standout. It’s pretty rare for KS to sell land, because while a sale gives you a one-time profit, holding on generates steady income in perpetuity.
For Dell, the math is easy. He now owns the property outright, which makes any future sale much cleaner and surely a lot more lucrative.
Just as a reminder: Larry Ellison bought 98% of Lānaʻi, including two of the three hotels, for $300 million back in 2012. He later picked up Hotel Lānaʻi, so he now owns all the hotels on the island (along with the Island). That is just pocket change for Larry, who recently had a one-day stock gain of $100 billion.
So yeah, Dell paid more for the land under one resort than Ellison did for an entire island.
Put that on your Monopoly board.
Let’s say Eliisons’ and Dells’ are unlikely to be like the Robinson family of Niihau (see entertainment section).
If you are interested in a deeper analysis of the investment, my friends at Powell & Aucello explain it in detail here.
