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Waterfront Plaza
buyer to renovate

A Mapunapuna building
is also part of the package deal

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By Russ Lynch
Star-Bulletin

New York-based Teachers Insurance & Annuity Association has completed its deal to sell the Restaurant Row and Waterfront Plaza complex to an equal partnership of two mainland real estate companies, Kojaian Management Corp. and Witkoff Group.

The partners also bought the three-story Control Data office building in Mapunapuna from TIAA, in a $175 million package deal that also included TIAA-owned properties in San Francisco, Oakland and Las Vegas. Prices for the individual properties were not disclosed.

TIAA provided the original financing for the seven-building complex on Ala Moana that makes up the Restaurant Row dining and entertainment area and the office suites next to it. TIAA bought the complex for $50 million in a foreclosure auction two years ago.

Michigan-based Kojaian's agreement to buy the property was announced in September. The purchase does not include the 8.7 acres under the complex. The land is leased from Kamehameha Schools.

The complex has about 515,000 square feet of leasable space, Claire Sheehan, a spokeswoman for TIAA, said today.

Kojaian, based in Bloomfield Hills, Mich., owns about $1 billion worth of properties and recently has been looking for investments in Hawaii.

The partnership of Kojaian and New York-based Witkoff will undertake significant renovations and develop a new look for the restaurant-retail complex, said Dale Watchowski, chief investment officer at Kojaian.

"What we want to do is redesign the plaza area that you know as Restaurant Row," he said. "We feel that the current design layout is a bit dated."

The clock in the center will go and design changes will include new colors and landscaping. "We want to make it more attractive to people that are passing by," to attract them to come in, Watchowski said.

He is visiting Honolulu from Kojaian's headquarters and has been consulting with design and marketing firms, he said. The new owners like the quality of the current mix of restaurants and shops and will likely add two more restaurants, Watchowski said.

Colliers Monroe Friedlander Inc. has been kept on to manage the property and the leasing. Andy Friedlander, the firm's chief executive, said business has been going "exceedingly well" following the introduction of new restaurants and expansion of one of the early ones, Ruth's Chris Steak House.

"We're seeing people who haven't been to Restaurant Row in eight years coming in now," Friedlander said.

Colliers Monroe Friedlander was brought in by TIAA in March 1999 to take over the management and leasing.

The waterfront property became available after TIAA filed a foreclosure action against its developer, Bruce Stark, ran into financial trouble and was unable to make loan payments. TIAA said at the time that Stark's company, One Waterfront Plaza Associates, was $4 million behind in its mortgage payments.

TIAA said the property purchases were wrapped up last week.

The insurance fund is also selling the Seagram Building in New York for $375 million and announced last week that it had sold $487 million worth of commercial property mortgages to Morgan Stanley, Dean Witter & Co.