Posted on: Saturday, May 1, 2004

Shidler in line to purchase

By Andrew Gomes
Advertiser Staff Writer

Local real-estate investment firm The Shidler Group has emerged as the leading prospective buyer of Waterfront Plaza, a commercial complex including Restaurant Row that was put on the market in February by its Mainland owner.

Shidler is negotiating an agreement to buy the property on the edge of downtown Honolulu in a deal estimated to be close to $75 million, according to one person familiar with the sale effort who asked not to be identified because confidentiality agreements are involved.

A Shidler principal declined comment yesterday, but others said the acquisition could be completed as early as June.

A partnership between Michigan-based Kojaian Management Corp. and The Witkoff Group of New York owns Waterfront Plaza, which has 415,000 square feet of office space and 90,000 square feet of restaurant and retail space anchored by Wallace Theaters, the Row Bar, Ocean Club, Ruth's Chris and Sunset Grill.

The partnership bought Waterfront Plaza a little more than three years ago for $47 million, and spent $1.7 million upgrading and leasing the property, which is about 97 percent occupied.

In February, Kojaian-Witkoff began soliciting buyers for the asset through international real-estate investment banking firm Secured Capital Corp.

A Secured Capital official in San Francisco declined comment yesterday. A representative of Colliers Monroe Friedlander, the local real-estate firm managing the property, also declined comment.

Former Hawai'i developer Bruce Stark built Waterfront Plaza in 1988 for $113.5 million. But after initial success, Stark lost the property to a lender in 1998 after a glut of office space, competition from the newer Aloha Tower Marketplace and struggling economies in Japan and Hawai'i thrust the project into financial trouble.

In late 2000, lender Teachers Insurance and Annuity Association sold the complex to Kojaian-Witkoff.

Shidler, which has offices in Honolulu and San Diego, owns and operates more than 6 million square feet of commercial property in Hawai'i, Texas, Arizona and California.

Its recent acquisitions in Hawai'i include Davies Pacific Center, the Pan Am Building, Bayview Golf Course, and office and retail space in Waikiki.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.