Roughly 80 businesses renting space in a Kaka'ako industrial building are being offered a chance to buy their units under an offer from local developer Peter Savio.

Savio is acquiring the six-story Kakaako Commerce Center at 875 Waimanu St. from a California real estate firm, and intends to sell the units as warehouse and office condominiums.

The deal would give tenants in the big, green building makai of BMW of Honolulu the first opportunity to own their units instead of paying rent.

One tenant, Will Menendez of Will's Automotive, said the idea is attractive, but he doubts he can afford it.

"It gives the smaller shops the opportunity to own their own space instead of paying someone else's mortgage," he said. "That's always best."

But Menendez estimates that his 4,700-square-foot space will be offered for around $1 million. "To the average small-business guy, that's a lot of money," he said. "I'd have to win the lottery to buy this place."

Savio said he is trying to price units so monthly mortgage payments wouldn't be too much more than what tenants already pay for rent, perhaps around $250 a square foot.

If tenants choose not to buy, Savio can sell units to other interested buyers, who would assume existing tenant leases for space bought. About 80 tenants occupy roughly 200 units in the building, which Savio plans to sell by the unit.

Martha Vera, part-owner of packaged foods distributor Food Factory and seafood wholesaler Phillips Sales that have operated in the building for about 25 years, said she's not sure whether she will try to buy the space as a condo.

"It was a big surprise for me," she said about Savio's plan, about which the developer informed tenants in a recent letter. Vera said ownership may be attractive, but comes with shared responsibilities for maintaining and managing the building through a condo owners association.

Savio, a longtime developer, primarily has converted residential apartment buildings to for-sale condos. He has created some industrial and office condos on properties that also had residential rentals, but Kakaako Commerce Center is the developer's first stand-alone warehouse condo conversion.

"It's a newer area for us," he said.

The Kaka'ako building has roughly 200,000 square feet of space. The first five floors are configured for warehouse use, and the sixth floor is office space.

Savio said the building is a rarity because it's a multistory concrete warehouse just outside downtown Honolulu in an area where industrial space is being redeveloped into high-rise residential condos and other uses.

"There ain't going to be a lot of warehouse left in Kaka'ako," he said. "It's the last downtown real quality warehouse."

O'ahu's industrial real estate market for a few years has been extremely tight, with little available space for rent and rising rental rates.

Steve Sofos of local commercial real estate firm Sofos Realty Corp., which did some consulting work on Kakaako Commerce Center a few years ago for the owner selling the building to Savio, said it will be interesting to see whether businesses buy a lot of the space in the building.

"Only the market will tell," he said.

Other developers in recent years have successfully converted office buildings and hotels into condos sold to individual owners by the unit. Several industrial condo projects also are being developed farther outside Honolulu.

Kakaako Commerce Center was built in 1971. An affiliate of California-based Fowler Property Acquisitions bought the building three years ago for about $15 million, according to property records.

Savio said he has a contract to buy the building for about $35 million, and expects to complete the transaction in May.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.