Land under condo for sale
By Andrew Gomes
Advertiser Staff Writer
A company controlled by the heirs of the late local financier Hung Wo Ching is selling the land under the Waikiki Landmark luxury high-rise condominium, in one of the largest voluntary sales of leasehold residential real estate in Hawai'i.
Owners and buyers of all 188 units in the bridged twin towers at 1888 Kalakaua Ave. are being offered fee simple interest to the property by landowner Aloha Securities & Investment Co.
Prices for the fee interest range from $130,688 to $522,496 for a total of $32 million.
Christine O'Brien, a vice president of Coldwell Banker Pacific Properties and sales manager for the Landmark, expects 85 percent to 90 percent of unit owners to purchase the fee simple titles.
Any unsold land under the condominiums will be bought by the building's association of apartment owners, which will collect lease rent from leasehold owners, O'Brien said.
An Aloha Investment official declined to comment on the business decisions.
But real estate observers noted that the city's recently upheld residential leasehold condemnation law would have allowed Landmark unit owners to force the landlord to sell.
O'Brien said that the Landmark's owner association had been moving toward taking such action, but that the group was very early in the process.
"This is a genuine voluntary offering," she said.
The offering, mailed to Landmark unit owners yesterday, is expected to speed sales of remaining units in the once-troubled project that was completed in 1993 and stood empty for the first couple of years.
O'Brien said 20 units remain unsold, with five in escrow and 15 available, including four penthouses.
Of the 15, fee-simple prices range from $400,188 for a 1,123-square-foot two-bedroom unit, to $5.4 million for a furnished 4,800-square-foot penthouse.
Originally, buyers balked at the leasehold prices, which ranged from $347,000 to $8.1 million and came with fixed lease rent until 2015 and lease expiration in 2055.
Developer Waikiki Landmark Partners, led by a subsidiary of now-bankrupt and imprisoned businessman Sukamto Sia, lost the property in 1995 when California-based investment firm Oaktree Capital Management acquired the mortgage from a consortium of Japanese lenders.
Coldwell Banker was hired to sell 188 units in 1996 and had sold about half by mid-1997 when a slowdown hit the market. Sales began to pick up again two years ago, O'Brien said.
Peter Savio, a local developer whose business includes buying leasehold rental buildings and converting them for fee-simple sale, said the leased-fee sale of the Landmark is the best thing that can happen for owners.
"You are buying the fee so you don't have to pay the rent," he said. "That's exciting."
Similar sales have or are taking place at Yacht Harbor Towers in Waikiki, the Marco Polo on Kapi'olani Boulevard, One Waterfront Towers in Kaka'ako and Harbor Court in downtown.
Savio said the Landmark's luxury price range makes the total value of leased-fee sales one of the biggest.
Robert Hastings, president of local appraisal firm Hastings Conboy Braig & Associates Ltd., said it's an active market for such sales, as leasehold owners are eager to take advantage of low interest rates, and higher property values are benefiting landowners.
The Landmark's leased-fee prices, at around $300 a square foot, are pretty good for both the seller and the buyers, Hastings said.
The per-square-foot price is more than the landowner could get for the property's 2.6-acre site if it were undeveloped, he said.
"It's worth much more to the individual (unit) owners," he said. "They will buy these things."
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
