Posted on: Wednesday, June 15, 2005
Deal sealed for homes at Kalaeloa
By Andrew Gomes
Advertiser Staff Writer
San Francisco-based real-estate investment firm Carmel Partners Inc. yesterday announced it has completed its expected purchase of former Navy rental housing at Kalaeloa, paying $79.5 million for 520 homes at the former Barbers Point Naval Air Station.
The company said it plans to invest $5 million to $8 million in common area and home interior improvements, and that it will keep the homes in the rental market for civilian and military tenants.
The property comprises mostly townhomes in three neighborhoods called Orion Housing, Orion Park and Makai. The average price paid per home was $152,885.
Excluded from the purchase was a 53-acre neighborhood called On Station comprising 28 single-family homes dating back to the 1940s.
Chris Beda, chief investment officer for Carmel Partners, said the company is considering buying the On Station property where only about a third of the homes are in a livable condition and occupied.
Carmel bought the 520 homes from Ford Island Properties, a private partnership that acquired the homes and other real estate at Kalaeloa two years ago from the Navy as part of a deal requiring the partnership to finance and construct new and upgraded facilities for consolidated Navy operations at Pearl Harbor.
Ford Island Properties spent roughly $5 million renovating and renting the former Navy homes at Kalaeloa, most of which were in major disrepair or empty and unsuitable for tenants.
Two years ago while still under Navy control, only about 190 of nearly 550 Kalaeloa homes were occupied. Ford Island Properties this year increased the number of rented units to about 480.
Carmel, which owns about 10,000 apartment units on the Mainland, is a major owner of multifamily rental housing in California but in recent years has looked to Hawai'i for investment opportunities.
The company in mid-2002 bought the 700-unit Moanalua Hillside Apartments complex for nearly $50 million and spent roughly $10 million on improvements including apartment upgrades, a sand volleyball court, putting green and bike racks.
Carmel sold the complex to an affiliate of Los Angeles-based Douglas Emmett Realty Advisors for $108.5 million in January, according to property records.
Late last year Carmel bought the Aloha Surf Hotel fronting the Ala Wai Canal in Waikiki for $15.7 million, and is renovating and selling the 204-unit property room by room to individual buyers.
Beda said Carmel continues to look for other acquisition opportunities in the state. "We're interested in Hawai'i as one of our long-term primary markets," he said.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
