Big Island-based developer Brian Anderson has expanded his Hawai'i hotel acquisition spree, purchasing the 48-room Marc Waikiki Royal Suites on Beach Walk.

Anderson and investors acquired the all-suite hotel from Japan Service Co., an affiliate of Hawaii Katokichi Inc., for about $12 million, according to property records.

Will Tanaka, an Anderson partner and president of Aloha Hospitality Consulting LLC, said plans are preliminary but include renovating the property and reselling the one- and two-bedroom units with kitchens to individual buyers.

The Royal Suites is one of many Hawai'i hotels in the past several years that have been bought, upgraded and resold by the room in what has become known as condotel conversions.

Unit buyers typically continue renting their room or rooms to visitors through a third-party hotel management company, though some reserve their investments for longer-term rentals or personal use either as a vacation abode or primary residence.

Condotel sales have become popular with a mix of buyers from the Mainland and Hawai'i who have bought an estimated 2,000 rooms in the past few years. More than 1,600 units, including 1,150 rooms at the Ala Moana Hotel, are available for sale or are being prepared for sale.

Anderson has emerged as one of the most active developers in the business locally. Earlier this year he led the purchase of the 350-room Radisson Kauai Beach Resort with plans to sell units as condos. Last year, Anderson partnerships sold renovated units in the former Waikiki Terrace Hotel, now known as the Outrigger Luana Waikiki, and Kaua'i's Islander on the Beach hotel.

Anderson also purchased the W Honolulu-Diamond Head hotel in Waikiki last year, though that property has continued operating as a wholly owned hotel.

Among recent hotels sold to buyers by the unit, some are well suited for residential use, though many are not because of small room sizes and absence of kitchens. Some projects, such as the Ala Moana Hotel, prohibit use of even a microwave oven or rice cooker in many units.

The Royal Suites, built in 1961, has full kitchens that make it attractive for residential or hotel use.

"It's one of the few condos on the makai side of Kalakaua," said Ron Watanabe, vice president of hospitality advisory services for local real estate firm Chaney, Brooks & Co.

Watanabe said the hotel is old but well maintained, and presents an opportunity to tie in a renovation with Outrigger Enterprises' $460 million redevelopment of its Lewers Street hotels into a retail, entertainment and lodging complex known as Waikiki Beach Walk.

The back side of the Royal Suites is between the former Ohana Coral Seas, which Outrigger has demolished, and the Ohana Royal Islander, which Outrigger plans to demolish in a later phase of its Beach Walk project.

Katokichi bought the Royal Suites in 1997 for about $5 million from State Savings & Loan. The Japan-based company recently sold two other Waikiki hotels, the Ohana Waikiki Surf and Ohana Waikiki Surf East, to San Diego-based real estate firm eRealty Cos.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.