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S.F. group
buying 318 rental
units in Waipio

The SunPoint investors
are paying $23 million

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By Tim Ruel
Star-Bulletin

A San Francisco real estate investment group is buying 318 rental townhouse units at SunPoint, a 44-building project in Waipio, for $23.2 million from Gentry-Pacific Ltd.

Bay West Royal Palm LLC should complete the fee-simple deal by tomorrow, said Joe Fadrowsky, Gentry vice president. SunPoint has a total of 376 units, but 58 are individually owned that are not part of the deal. The rental units are almost fully occupied.

Bay West plans to spend $4.5 million to redevelop SunPoint and start selling units as condominiums by early next year, said Craig Vallely, a Bay West managing partner

"It's still in the development stage, but we intend to upgrade the exterior appearance and upgrade the landscaping," Vallely said yesterday.

SunPoint, built by Gentry on 8.88 acres in the late 1980s as part of a master plan for Waipio, mainly consists of two-bedroom units grouped into separate one- and two-story buildings.

Bay West is an affiliate of San Francisco-based Bay West Investment Co. The managing partners of both companies bought the 91-room Kaulana Kai Hotel in Waikiki for $5.7 million in February from its Japan-based owners. The partners are renovating the property -- renamed the Waikiki Marc -- and expect to finish by the end of the year.

The partners have also bought three apartment buildings on Pualei Circle off Diamond Head for $11.5 million last year, renovated them and have resold almost all the new units as condos, Vallely said. SunPoint will become a similar project, Vallely said.

Vallely said Hawaii's economy bottomed out in late 1998, and real estate values are rising. "So that's what prompted us to be aggressive investors."