Kamehameha Schools has finalized the sale of the land beneath the renowned Royal Hawaiian Hotel in Waikiki, receiving $510 million from the Japan-based commercial real estate firm Daisho Co. The transaction, which closed on a recent Thursday, involves a 10.3-acre parcel considered one of the trust’s most valuable properties in Hawaii. The hotel will continue to operate under the ownership of Kyo-ya Hotels & Resorts, which holds a long-term lease on the land.
Livingston “Jack” Wong, CEO of Kamehameha Schools, expressed in a statement that the timing was optimal for the sale. He emphasized the strategic nature of the decision, which was made after considerable deliberation. According to spokesperson Sterling Wong, this decision was not influenced by ongoing litigation from a mainland nonprofit challenging the trust’s admissions policies that prioritize students of Native Hawaiian ancestry.
Strategic Decision with Emotional Undertones
The sale marks a significant moment for Kamehameha Schools, which was founded by Princess Bernice Pauahi Bishop, the last direct descendant of the Kamehameha line of Hawaiian monarchs. Crystal Rose, chair of the board of trustees, acknowledged the emotional weight of selling land that holds deep historical significance. “We are always emotional when we sell land because all aina is special,” Rose stated. She added that the decision was made with the trust’s responsibilities in mind, aiming to maintain a dynamic portfolio that best serves its educational mission.
Since its establishment in 1884, Kamehameha Schools has become the largest private landowner in Hawaii. The trust has primarily leased its valuable properties for residential and commercial development, selling portions of residential land over the years to reinvest the proceeds into assets that support its educational programs. As of 2024, the trust’s investment portfolio is valued at $15.2 billion, including $4.7 billion in Hawaii real estate and $10.5 billion in diversified global investments.
Recent Transactions and Future Plans
In recent years, Kamehameha Schools has executed several notable land sales, including a parcel in Kakaako which was transformed into residential condominiums. Earlier this year, the trust sold the land under the Four Seasons Resort Hualalai for approximately $400 million to hotel owner Michael Dell. This sale followed years of ground lease income that significantly contributed to the trust’s educational initiatives.
Typically, Kamehameha Schools has opted to retain ownership of land while selling the associated commercial buildings. A notable example occurred in 2014 when the trust sold the Royal Hawaiian Center for $697 million, retaining the land beneath it. Currently, there are no plans to sell the land under the shopping center adjacent to the Royal Hawaiian Hotel, which features a historic coconut grove and a statue of Princess Pauahi.
The original Royal Hawaiian Hotel, often referred to as the “pink palace,” opened in 1927 and was initially developed on land leased from Kamehameha Schools by a company connected to Matson Navigation Co. The hotel has changed hands several times, being acquired by Sheraton Corp. in 1969 and later sold to Kyo-ya in 1974 along with other Sheraton properties.
Kamehameha Schools has stated that it maintains a positive relationship with Kyo-ya as the hotel owner and ground lessor. Daisho Co., a family-owned private company that owns hotels in Japan, Singapore, and Australia, has committed to preserving cultural elements of the Waikiki site while also investing in scholarships and cultural programming.
This sale represents a significant financial move for Kamehameha Schools, reinforcing its commitment to balancing financial sustainability with its mission to support Hawaiian children through education.
