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ORLANDO-High-flying CNL Hospitality Corp, already in 17 states, is now in Hawaii.

The locally based lodging company is paying Marriott International Inc. $130 million or $992 per room for the 22-year-old, 1,310-room Waikiki Beach Marriott Resort, directly across from the world-famous Waikiki Beach in Honolulu on the island of Oahu.

Marriott will manage the two-tower property. CNL has started a $65 million renovation expected to be complete in 2002. Marriott still has a minority equity interest in the asset.

The trophy-property transaction marks the 35th hotel CNL Hospitality has purchased in 18 states. The total room count is 8,500. The five-acre Waikiki Beach Marriott is the fourth largest in Hawaii. It was formerly known as the Hawaiian Regent Hotel.

The 1,310 rooms are housed in the 33-story Kuhio Tower and the 25-story Kalakaua Tower, both overlooking the Pacific Ocean, Diamond Head and Kapiolani Park.

“The Waikiki Beach transaction further expands our relationship with CNL, which now owns 33 Marriott hotels,” Arne Sorenson, chief financial officer, Marriott International, says in a prepared statement. “The strategies of CNL and Marriott are aligned to focus on the lodging industry’s leading hotel properties in leading markets.”

The investment “fits squarely into our strategy of owning premium hotels in high-growth markets and working alongside the industry’s leading lodging companies,” Charlie Muller, chief operating officer of CNL Hospitality Corp., says in the same statement.

CNL Hospitality is the hotel investment and development subsidiary of CNL Financial Group Inc., a $5 billion, privately-held, Orlando-based real estate investment and finance company. CNL Financial is one of Orlando’s biggest office/retail/hotel property owners.

“Our company has anticipated finding the right investment opportunity in Hawaii and the Waikiki Beach Marriott far exceeded any of our expectations,” James M. Seneff, chairman/CEO, CNL Financial Group, says in the statement.

For Seneff, the waiting has paid off. Although the estimated $992 per room is on the lofty side for the five-star hotel, the $130 million price is below the $135 million price Marriott is believed to have paid for the property in November 2000, according to a previously published report in the Honolulu Advertiser, a daily newspaper.

Marriott officials could not be reached at GlobeSt.com’s publication deadline to confirm its November price. But the Honolulu Advertiser previously reported Chicago-based Oxford Capital Partners Inc. was contracting in September 2000 with the hotel’s owner, Otaka Inc., to buy the property for $135 million or $1,029 per room. Otaka bought the hotel in 1986 for $220 million or $1,634 per room, the newspaper reported.

The paper reported the hotel would be marketed under the Marriott brand, giving the Washington, DC-based company its second major lodging property on Oahu. Marriott also owns the 783-room Ilikai Hotel.

Another Honolulu publication, the Pacific Business News, reported in August 2000 the Hawaiian Regent was having cash-flow problems and “the property fell into disrepair in the last few years.” The newspaper reported new owners would face at least $30 million in renovation costs. Daily room rates at that time were $170 to $1,200.

CNL Financial Group owns 3,000 properties in 49 states. The assets are in the hotel, retirement, corporate facilities, community development, retail and restaurant sectors.

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