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Kunia complex
selling for $29 mil

The sale of the 402-unit
rental community to a Denver
firm has been OK'd by
bankruptcy court

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By Tim Ruel
Star-Bulletin

A Denver-based company will buy developer Herbert Horita's bankrupt Royal Kunia Apartments on Oct. 16 for $29.53 million, according to a U.S. Bankruptcy Court filing.

Royal Kunia Investment Co. is purchasing the 402-unit Central Oahu rental community, comprising three separate residential projects on nearly 27 acres. The court approved the sale on Aug. 28.

Royal Kunia Investment must assume all current tenant leases, and a zoning condition that requires a certain level of affordable housing.

The rental townhomes, grouped into 65 two-story buildings, are almost fully occupied, said Leonard Kacher, vice president of Realty Management Corp., a Horita affiliate that manages the townhomes.

Royal Kunia Investment is planning improvements for the projects, such as new parks, but cannot release details yet, said attorney Jerrold Guben, who represents the buyer.

Guben said the buyer is from Denver but would not give further details.

"They thought it was a good investment, given the recovering market here in Hawaii," Guben said.

Horita's company Royal Kunia Apartments Inc. filed for Chapter 11 reorganization bankruptcy last year, listing $30.5 million in assets and $33.4 million in liabilities. The sale would end the reorganization.

Horita built the first two projects -- Royal Kunia Gardens, Halekua Gardens I -- in 1990 and a third project, Halekua Gardens II, in 1994, Kacher said.

Current rental prices range $705-$790 for one bedroom, $810-$995 for two bedrooms and $920-$1,150 for three. Average square footage goes from 500 square feet to 1,024. All units come with parking stalls.

The sale follows the purchase of the nearby Royal Kunia Country Club earlier this year.

Liongain Hawaii Inc. bought the 163-acre, 18-hole golf course for $11.5 million in May from its Japan-based developer Royal Oahu Resort Inc. The course, completed in 1994, has never opened because the city was owed a $13 million fee for the necessary permits.

Changing hands The Royal Kunia Apartments, being sold in a bankruptcy proceeding, consists of: Royal Kunia Gardens Built in 1990 150 units in 21 buildings 9.83 acres Halekua Gardens I Built in 1990 152 units in 26 buildings 10.65 acres Halekua Gardens II Built in 1994 100 units in 18 buildings 6.49 acres Total: 402 units 65 buildings 26.97 acres