Palms Resort, Saipan
Saipan, US Commonwealth of the Northern Mariana Islands
Purchased former Nikko Hotel from Japan Airlines and sold within three years to Korean investor for a 10x gain on... Read More
Purchased former Nikko Hotel from Japan Airlines and sold within three years to Korean investor for a 10x gain on purchase price. Read Less
Size of property350 key resort plus staff housing on 30 acres beachfront.
Acquisition Cost$2 million
Keys350 plus over 50 staff housing apartments.
What we accomplished
Advised a public, closely held local corporation in negotiation of the purchase from Japan Airlines on very favorable terms due... Read More
Advised a public, closely held local corporation in negotiation of the purchase from Japan Airlines on very favorable terms due to the global financial crisis and the distressed financial condition of the seller, Japan Airlines. We identified the unique opportunity to buy the best hotel asset on the tropical island popular with Japanese, Korean and Chinese tourists. We could immediately add value by negotiating a new ground lease from the remaining 17 years to a new 55 year lease for a small payment of $250,000. Within three years sold the hotel for $20 million or a 10x gain despite appraisals valuing hotel at $10 million. Mr. Wickline was asked to replace prior CEO to rescue company from prior bad investments that put company into insolvency with its share price plummeting to $2. Within two years of becoming CEO, the share price rose to $40. New Korean owner renovated hotel to now being the jewel hotel asset on the island, the Kensington Hotel. Thus, we succeeded in getting the hotel into ownership of a major investor able to renovate the hotel into a trophy asset for the island. Read Less
Hotel owner was Japan Airlines and managed by their affiliate Nikko Hotels since 1985. In 2008, Japan Airlines was... Read More
Hotel owner was Japan Airlines and managed by their affiliate Nikko Hotels since 1985. In 2008, Japan Airlines was in severe financial distress and cutting air routes, such as Tokyo - Saipan. Hotel needed renovation and the ground lease had only 17 years remaining. The dire situation held the seeds of opportunity as we negotiated low purchase price from Japan Airlines. We had a plan to add value by immediately negotiating a new 55 year ground lease with the private landowner for a one time payment of $250,000. The Board asked Mr. Wickline to remain on the Board and replace the prior CEO. In November 2009, he took control of a company near insolvency and bankruptcy. He quickly arranged $3 million interim financing to keep the company afloat, arranged an orderly closing of the hotel to cut losses while keeping confidence of local residents and government officials, and then negotiated sale of the closed hotel to a major Korean firm for $20 million or 10 x the original purchase price and 2x the highest appraised value. When he became CEO, the company’s local share price was $2 and post sale had a share cash value over $40. Read Less