MW Group completes Pioneer Plaza purchase
By Andrew Gomes
Advertiser Staff Writer
Local real estate development firm MW Group Ltd. has bought the Pioneer Plaza office building downtown for $42 million in what is the first major real estate transaction to close in Hawai'i since the Sept. 11 terrorist attacks rocked the local economy.
MW Group said it plans to spend between $3 million and $9 million on lobby upgrades, tenant improvements and renovating the Cuhna's Alley food court and retail area.
The company, headed by Stephen Metter and Michael Wood, also will move its offices into the 21-story building at 900 Fort Street Mall.
Seller Ching Ming Wang bought Pioneer Plaza in 1986 for $44 million. The Japanese businessman put the property on the market as part of a strategy to place a greater emphasis on investments in China, but will retain a 15 percent stake in the office tower. He also owns the leasehold Waikiki Trade Center.
MW Group, which began negotiations in June, said the terrorist attacks two weeks ago made the purchase more difficult to complete because of added risk and lender pressure, but the firm moved ahead after a vote among company members.
"The sale," Metter said, "reflects a long-term commitment to perpetuating a better economy in Hawai'i."
Metter said fairly stable demand for office space, slight pressure on rising rents and no new downtown office building construction on the horizon made the investment attractive. "These dynamics make this a very strong strategic hold regardless of short-term dips in the market," he said.
Pioneer Plaza, home to the private Plaza Club, also diversifies MW Group assets, which include the largest self-storage facility on O'ahu, Salt Lake Self Storage, a Maui shopping center, Nimitz Business Center and 'Aiea Town Square.
Pioneer Plaza is about 88 percent occupied, slightly below the average for top-tier buildings in downtown Honolulu. The property will be managed by MW Group affiliate MW Commercial Realty. The purchase also included a separate five-story building fronting South King Street.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
