San Diego firm buying
2 Waikiki hotels

ERealty Fund, a San Diego investment firm that specializes in buying and fixing up distressed or undervalued properties and re-selling them, has plans to acquire the Ohana Waikiki Surf and the Ohana Waikiki Surf East hotels as well as an office and industrial complex in Iwilei.

The seller, Japan-based Katokichi Co., has not released terms of the three-property deal, but those close to the transaction estimate the purchase price will exceed $40 million.

Katokichi acquired the Ohana Waikiki Surf at 2200 Kuhio Ave. and the Ohana Waikiki Surf East, at 422 Royal Hawaiian Ave., from Outrigger Resorts in 1989 for an undisclosed price. The company also owns the 100,000-square-foot commercial complex at 720 Iwilei Road next to Dole Cannery

Meantime, ERealty also is selling its interest in the Airport Center, a 14-story office property that has massive Wyland whale murals gracing two of its sides, for about $24 million.

ERealty bought the fee-simple property at 3049 Ualena St. for $7.5 million in 1998 through 3049 Ualena LLC, according to state records. It carried out an extensive renovation in 2000, with the whale murals by artist Robert Wyland adding the finishing touch.

ERealty's reinvestment in the center boosted tenant occupancy to more than 90 percent. Now, the company is joining several commercial property owners who are putting Hawaii holdings up for sale to capitalize on strong prices.