Developer Peter Savio
plans to convert properties
into college student housing

Peter Savio, the developer responsible for the rash of hotel-to-condominium conversions in Waikiki, is eyeing aging retail and hotel properties to convert into college student housing.

In the next four years, Savio and an unnamed group of local investors plan to develop student housing, providing to 4,000 beds. Texas-based Century Campus Housing Management, which manages more than 18,000 beds nationwide, will partner with Savio to manage his student housing projects, he said.

The most notable project in Savio's ambitious plan is his upcoming refurbishment of Puck's Alley, an aging retail center at the corner of University Avenue and South King Street near the University of Hawaii's Manoa campus.

Savio said he plans to renovate Puck's Alley, which sits on 73,162 square feet of land in Moiliili, and possibly build a few hundred dorm rooms above the complex. Another 250 or so rooms could be put on the parking lot behind the center, he said.

Savio and James K.Y. Wong, the developer of Puck's Alley, have reached a sale agreement for the property's lease, but Savio needs a longer-term lease from the property's landowners for his plan to make economic sense, he said.

"We want to get the leases extended," Savio said. "If we don't get them extended, we will just renovate the property and operate it as a shopping center."

"I look at Puck's Alley every single day," he said. "It's in a great location, but people forget it's there. If it were refreshed and modernized, it would have great appeal."

Student housing isn't an entirely new venture for Savio. He operates a 194-bed dorm on Kalo Place in the University area, which he bought 18 months ago for about $7 million fee simple. Rooms in the dorm, which is 100 percent occupied, rent for about $650 a month, he said.

He's also looking to build a dorm on a 30,000-square-foot property in Makiki that he has leased from a private landowner, and has a contract to buy the Hana Hotel in Waikiki, which he would convert into student housing.

While student housing conversions aren't initially as profitable as converting hotels to condominiums, they are the right thing to do, Savio said.

Increased tourism and a strong residential real estate market have dramatically reduced the amount of rentals available to students, he said.

"There's a real shortage of rooms, and it's only going to get tighter," Savio said. Many students on several campuses around Honolulu have been displaced, he said.