Harbor Court
sale completed

Harbor Court on Nimitz Highway was built in 1994.
Photo by Kathryn Bender, Star-Bulletin

The deal is expected to lower condo prices
in the downtown building

By Rick Daysog
Star-Bulletin

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AHI Harbor Limited Partnership, a joint venture between Black's Apollo Advisors L.P. and Chicago-based Trinity Investment Trust L.L.C., yesterday acquired the note to the high-end office and condominium complex from Japan-based lender Mitsui Trust & Banking Co.

Sources said the sale price was well below the mortgage's price.

Mike McCormack, managing general partner of builder Harbor Court Developers, said the transaction will allow the company to reduce condominium prices between 10 percent and about 50 percent, depending on the size and location of the unit.

Condo prices will ranged between $500,000 for smaller units to $950,000 for larger units, said Scott McCormack, vice president of McCormack Properties. Previously, prices ranged between $550,000 and $2 million.

Only 15 percent of the project's 120 high-end apartments have been sold.

Jon Miho, attorney for Trinity, said that AHI will retain McCormack Properties as the manager of the office complex and Coldwell Banker Pacific Properties will continue to serve as the broker for the condos.

"The sale of the debt has breathed new life into Harbor Court," said McCormack.

Harbor Court, located across Nimitz Highway from Honolulu Harbor, was completed at a cost of $185 million in 1994 by Beam Harbor Venture, whose partners include McCormack Harbor Properties Ltd. and Bradley Harbor Holdings Ltd.

The complex boasts 200,500 square feet of commercial and retail space along with the condo units. The building recently leased several floors of office space to Kapiolani Medical Center, according to Miho. About 64 percent of the project's office space is leased.

The developers sued Mitsui back in 1995, alleging that the lenders failed to make final loan payments. The developers said they agreed to dismiss their suit. Any loan defaults, in turn, have been cured, they said.

Black is the former Drexel Burnham Lambert Inc. mergers-and-acquisitions specialist who now heads New York-based Apollo. A recent Business Week magazine article dubbed him "Wall Street's Dr. No" for his bearish approach to deal making.

Apollo, which manages about $5 billion in investments, is well known for buying distressed real estate and stocks on the mainland. Apollo has controlling or minority interests in more than two dozen diverse companies, including Salant Corp., maker of Perry Ellis sportswear, Business Week said.

Black is also acquiring two Manhattan office buildings as part of the bankruptcy reorganization of real estate giant Olympia & York U.S.A. Black's Apollo Real Estate Investment Fund L.P. is one of O&Y's largest creditors.

Trinity's officers include isle developer Charles Sweeney and real estate executive George Ruff.