Citibank sells all its Executive Centre units
By Andrew Gomes
Advertiser Staff Writer
Citibank of New York has sold all of the 276 residential/ commercial units in the downtown Honolulu mixed-use high-rise Executive Centre it acquired from bankrupt developer Sukamto Sia, and is finalizing a plan to sell 116 hotel units it owns.
Advertiser library photo
The residential/commercial unit sales, the last of which are expected to close escrow in mid-May, raised roughly $18 million for the bank, which was owed about $44 million in principal plus interest on a Sia loan used to buy the 41-story building on Bishop Street.
Citibank acquired Executive Centre about a year ago when previous buyer Sukamto Sia defaulted on a $44 million loan.
Citibank, Sia's primary lender, formed Exct Holdings Inc. to acquire the units a year ago under a bankruptcy reorganization plan for MKS Executive Partners LP, a Sia-controlled holding company that owned Executive Centre and filed for Chapter 11 more than a year ago.
The bank put the nonhotel units on the market in November, and had enough buyers lined up to sell out in one week, according to Frank Leslie, project broker with ERA Concepts Unlimited.
Leslie said the flurry of contracts was "unbelievable in today's market — in any market." Closing the nearly 300 sales took months longer because all the units were rented to tenants who had to be given notice for showing the property and time to move out in some cases.
Prices for the leasehold studio and one-bedroom units ranged from $37,500 to $94,000. The average price was $65,000.
Leslie said about 60 percent of buyers are investors, some of whom bought as many as 20 units each. The remaining 40 percent were sold to owner-occupants.
Units sold quickly despite their leasehold status with lease rent reopening in 2013. The lease continues for another 40 years after that.
Leslie said buyers were interested in the building's downtown location, flexibility of both residential or commercial use of units, parking, rental demand and a financing package that required only 3 percent down for owner/occupant buyers.
Generally, commercial users occupy floors 2 through 12, with 13 through 30 primarily residences.
The top 10 floors, excluding the penthouse, are managed by Aston Hotels & Resorts as a hotel. Leslie said the bank is finalizing a plan to dispose of those 116 hotel units, which also allow for residential or commercial use.
Local hotel broker Ron Watanabe said he doubts the units will be attractive to a hotel company because of their residential-style layout and limited hotel amenities. "It's really not very feasible as a hotel operation," he said. Still, Watanabe said there is demand for hotel rooms downtown.
Sia acquired Executive Centre in 1987 for $50 million from developers who had struggled with the property since the early 1980s. He converted more than 100 units into hotel suites in 1992, but the slow economy hampered occupancy.
Citibank foreclosed on Executive Centre in May 1999, shortly before Sia was arrested in Las Vegas and charged with writing millions of dollars in bad checks. Sia's MKS filed for bankruptcy in December 1999.
Clifford Laughton, president and chief executive officer of Hawai'i-based Columbia Communications Corp., purchased 31 residential units, a penthouse, two commercial spaces and 65 parking stalls in August for about $4 million. He outbid Citibank by $100.
Sia is still facing charges of bankruptcy fraud and money-laundering in connection with his $296 million personal bankruptcy. The criminal trial is scheduled for May 22. The bankruptcy case is still pending.
Andrew Gomes can be reached by phone at 525-8065, or by e-mail at agomes@honoluluadvertiser.com
