Intracorp takes over
condo development
in Waikiki

The company plans to begin
building the 212-unit project
later this year, after a delay

A Hawaii native is returning home to take over development of a 212-unit luxury condominium in Waikiki as part of a deal that will transfer the project from a Los Angeles company to Intracorp San Diego.

The sale of the Watermark Waikiki by Irongate Ala Wai Investors LLC is expected to close by the end of the month and construction is to begin in October or November, said Keith Fernandez, president and chief operating officer of Intracorp San Diego.

A Punahou School graduate who worked for Molokai Ranch Ltd. before leaving the islands to open Intracorp's San Diego office in 1998, Fernandez will be in charge of the project.

Irongate had spent the past year buying land, getting regulatory approvals and commissioning architectural designs for the project, said Mike Pepper, an Irongate consultant. But while developing Watermark Waikiki, Irongate landed another opportunity to develop a larger condominium project in Waikiki, and Intracorp stepped up as a willing buyer of Watermark, Pepper said. The timing was right to sell, he said.

"I think it's a win-win," he said. "I think everyone's happy."

Fernandez concurred, saying Irongate had thoroughly laid the groundwork for the project.

"They did a good job of getting it teed up," he said.

Both companies declined to disclose the sale price.

Intracorp develops and manages luxury residential properties in San Diego, Los Angeles, San Francisco and Seattle. The firm's equity partner in the Watermark is Goldman, Sachs & Co.'s Whitehall 2005 real estate investment fund, Fernandez said.

Intracorp has not yet secured bank financing but has term sheets from five banks and is studying them, Fernandez said.

The project's architects are Guerin Glass Architects of New York and Architects Hawaii Ltd. The general contractor is Hawaiian Dredging Construction Co.

Brendan Guerin said the property, located at the edge of Waikiki, will be oriented to give all owners marina and ocean views. Some units also will have views of the mountains and Waikiki lights.

Bill Wilson, president of Hawaiian Dredging, said the contractor had planned to begin construction sooner, but the sale has pushed back the original timetable. Wilson said the date change presents a challenge amid Hawaii's construction boom and tight market for subcontractors, but one that is not uncommon with large projects.