Hawaii’s largest pension fund has sold two Maui golf courses after 18 years of ownership stemming from a soured real estate loan.

Managers of the state Employees’ Retirement System sold the Royal Kaanapali and Kaanapali Kai golf courses to Host Hotels &Resorts, which operates the oceanfront Hyatt Regency Maui hotel fronting one of the 36 golf holes.

The sale for $28 million closed last month and offset part of a long-ago loss ERS suffered over a bad debt secured by the golf course property.

Broadshore Capital Partners, an investment advisory firm ERS retained in 2015 to manage the golf course asset, announced the sale Monday.

The deal follows a decision last year by managers of the roughly $20 billion pension fund to abandon a plan to achieve a bigger return on the golf course asset by adding a hotel, condominiums and other amenities to the 305-acre property by reconfiguring golf operations to 27 holes.

Emmit Kane, chairman of the ERS board of trustees, said in a statement that the pension fund, which covers benefits for more than 140,000 Hawaii state and county public-­sector workers and beneficiaries, was pleased to sell the golf courses to Host.

Nathan Tyrrell, chief investment officer at Host, said in a statement that the company anticipates near-term potential to benefit from the acquisition through creative programming and experiences connected with its recently renovated hotel property.

“Host is excited to expand our investment in the Kaanapali Beach Resort area,” he said.

ERS acquired the golf courses in 2003 through foreclosure three years after Kaanapali Resort’s original developer, Amfac Hawaii, defaulted on a $60 million balance on a $66 million loan ERS provided the company in 1991.

To improve the property, ERS spent $13 million between 2005 and 2007 to renovate the golf courses, which include driving ranges and a clubhouse featuring a Roy’s restaurant.

After unsuccessfully trying to sell the property for an acceptable price, ERS in 2017 hired an affiliate of California-based real estate firm Lowe Enterprises to produce a conceptual redevelopment plan that included 156 to 256 condo units, a 136-room hotel, 80,000 square feet of retail space, a new clubhouse with a restaurant and pub, a family restaurant, a special-events area, a 4.5-acre park and an oceanfront beach club with a signature restaurant.

ERS abandoned its estimated $373 million redevelopment plan last year due to fallout in Hawaii’s economy and tourism industry triggered by the coronavirus pandemic.

The golf courses, originally built in the late 1960s and early 1970s, are open and continue under Host to be managed by national golf course operator Indigo Golf Partners, a firm formerly known as Billy Casper Golf Management recently acquired by Troon.