About 30 percent of the Harbor Court building is currently leased. Photo by Kathryn Bender, Star-Bulletin
About 30 percent of the Harbor Court building is currently leased. Photo by Kathryn Bender, Star-Bulletin
By Rick DaysogA mainland group, which includes financier Leon Black, has agreed to buy the downtown property
Apollo Hawaii Inc., a joint venture between Black's Apollo Advisors and Chicago-based Trinity Investments Trust L.L.C., have reached an agreement in principle to acquire the mortgage from a lender group headed by Mitsui Trust & Banking Co., according to Jon Miho, Apollo's attorney.
Apollo will have 60 days to complete the deal, according to Steve Anreder, Apollo's spokesman.
He said the deal underscores Apollo's belief that Hawaii's economy is improving.
The sale price was not disclosed.
Black is the former Drexel Burnham Lambert Inc. merger specialist who now is chief executive officer of Apollo. The company, which manages about $5 billion in investments, is known for buying distressed real estate and other assets on the mainland.
Trinity's principals include isle hotel developer Charles Sweeney and real estate executive George Ruff, Miho said.
Scott McCormack, vice president of McCormack Properties Ltd. which is the managing general partner for Harbor Court, said the McCormack group held discussions with Apollo about their planned purchase of the building's mortgage.
But he noted that no formal agreement has been made as to whether McCormack's will continue to manage the building.
"One of things they have emphasized to us is that they're very interested in the project's quality and would look to revitalize it if they acquire the debt," he said.
The complex was completed in 1994 by Harbor Court Developers, a limited partnership between McCormack Properties and Beam Harbor Venture, at a cost of $185 million. Harbor Court, which faces Honolulu Harbor on Nimitz Highway, has 186,000 square feet of commercial space and 120 condominium units. About 30 percent of the building is leased.
The Apollo deal comes more than a year after Harbor Court Developers sued Mitsui and other lenders, saying they interfered with the building's operation. The pending Circuit Court suit also alleged that the lenders failed to make final loan payments.
The building's operators are negotiating with Kapiolani Medical Center to lease several floors of office space, Miho said. Both McCormack and Kapiolani spokeswoman Pat Oda declined to comment on the specifics of the talks.