Savio buyingOutrigger Enterprises Inc. is selling two Waikiki apartment buildings to Peter Savio and is in negotiations to sell a third building to the local developer.
The developer is buying Ohana
Ala Wai Tower and Ala Wai Terrace
and is eyeing Tradewinds Mauka
By Rick Daysog
Outrigger, the state's largest hotel operator, has agreed to sell the 16-story, 47-unit Ala Wai Terrace and the 40-story, 136-unit Ohana Ala Wai Tower to Savio's Hawaiian Development Co., according to Mel Kaneshige, senior vice president at Outrigger Enterprises.
Kaneshige also said the company is in talks to sell the three-story, 144-unit Tradewinds Mauka complex to Hawaiian Development.
Terms of the deals, which are structured as three separate transactions, were not disclosed.
"We're concentrating on our core hotels in Waikiki and elsewhere and that's why we put these properties on the market," said Kaneshige.
The three apartment buildings, which cover about 3 acres, are located at the Ewa side of Waikiki along Ala Moana.
According to Savio, the fee simple sale of the Ala Wai Terrace will likely be completed within 10 days while the leasehold Tradewinds and Ala Wai Tower transactions will probably close in 30 to 60 days.
Savio said he plans to sell the individual apartment units as condominiums. The Ala Wai Terrace condos will be sold in fee while the Ala Wai Tower and Tradewinds units will likely be sold as leasehold units, he said.
Savio said he is in the process of obtaining necessary approvals from state Real Estate Commission to market the properties as condos.
The three buildings are part of a cluster of properties known as the Ala Wai Gateway.
During the late 1980s, Outrigger planned to develop a major upscale residential and hotel complex at the site but the hotel operator pulled back after the Japanese economy collapsed years later.
Outrigger proposed the site for the Hawaii Convention Center in the early 1990s but state officials selected the former Aloha Motors site on Kapiolani Boulevard for the complex.
Outrigger, which recently announced plans to develop a $300 million retail entertainment and hotel complex in central Waikiki, is in the midst of selling many of its noncore real estate assets.
Several years ago, Outrigger sold the Bishop Trust building on King and Bishop Streets in downtown Honolulu.
The Outrigger purchase comes as Savio and his various corporate entities are under financial pressure.
Earlier this year, Savio filed for personal bankruptcy protection and placed one of his corporate entities, Savio Inc., into Chapter 7 bankruptcy liquidation.
Savio said the bankruptcies -- which he characterized as a dispute with an "unreasonable" lender -- will not affect the pending deals. He said that other lenders have been supportive of his present transactions.
Savio said he expects to market one-bedroom, fee-simple units at the Ala Wai Terrace at around $150,000.
Leasehold one-bedroom condos and studios at the Tradewinds will likely be listed at $15,000 to $20,000. Leasehold units at the Ala Wai Tower will likely go between $25,000 and $85,000.