City Bank sells land in
Waipahu for $5.35MA newly formed group buys
the property for about one-quarter
of the market rate, sources say
Sugar Mill Glen LLC has acquired 15 acres of prime Waipahu commercial property from City Bank in a $5.35 million transaction, which market reports suggest is about a quarter of the going rate.
The property, on the mauka side of Waipahu Street, is adjacent to the popular Mill Town Center industrial park owned by Alexander & Baldwin Inc.. The land also is near the Leeward YMCA and the Filipino Community Center.
According to market sources, Sugar Mill Glen paid approximately $8 per square foot for the property in a region where industrial properties are selling for more than $30 per square foot. City Bank had acquired the property in December as part of a foreclosure proceeding against Amfac, said Wayne Miyao, spokesman for City Bank, who declined to comment on the transaction price.
"We were just lucky to find that opportunity before anyone else," said Graham Wood, spokesman for the newly formed Sugar Mill Glen, whose members include the Mark S. Glen Revocable Trust and Mana Kuleana Corp. of Honolulu.
The company plans to use the property for investment purposes and is weighing its options, Wood said.
"We've kicked around 100 different scenarios and we really haven't made up our minds," Wood said. "If someone has a good idea, we'll get behind it."
The company's only immediate plans are to clean up hydrocarbon contamination at a small center portion of the site. Contamination occurred when diesel fuel leaked from a long-since removed underground storage tank, Wood said.
Bio-remediation technology is being used to remove the contaminants, but site development can run concurrently with the three-to-four year environmental process, he said.
Elevated land values in Central Oahu's industrial market are tied to tight market conditions. Most of the desirable inventory in Oahu's industrial market is leased and the remainder is obsolete by mainland standards, according to market reports from Colliers Monroe Friedlander Inc.
"Sixty-five percent of all the industrial real estate was built prior to 1970 so any new stuff is exciting," said Stephany Sofos, retail analyst.
A healthy economy and low-interest rates are continuing to add muscle to a strong market, Sofos said, adding that many businesses are constructing their own buildings in Waipahu and other industrial parks for lack of finding the right space.
"It's become more affordable to own your own property rather than to rent it," she said. "And, Waipahu is becoming more attractive as it goes through a revitalization."
As Waipahu continues to develop, the Sugar Mill Glen land is likely to become a hot real estate commodity, Sofos said.
Sales at Mill Town Center, which is adjacent to the Sugar Mill Glen property, have sizzled, said Kris N. Kobayashi, coordinator of community relations at Alexander & Baldwin.
"Sales for the Mill Town Center are going very well," Kobayashi said. "We have received and are accepting back up offers."