Hawaii’s Largest Office-Industrial Park Lands $165M Financing

By Gail Kalinoski

Airport Industrial Park in Honolulu

The owners of Airport Industrial Park, the largest office and warehouse complex in the state of Hawaii, have refinanced the 1.3 million-square-foot asset in Oahu, Hawaii, with a $165 million loan arranged by Sonnenblick-Eichner Co.

The 15-year, fixed-rate, interest-only loan is secured by Airport Industrial Park, a 12.5-acre, mixed-use property located adjacent to Honolulu International Airport. The financing was at 65 percent loan-to-value. While Sonnenblick-Eichner only identified the source of the loan as a domestic life insurance company, the Pacific Business News reported it was provided by New York-based Allegiant Real Estate Capital.

“We had a tremendous interest in this financing opportunity from both CMBS lenders and life insurance companies. Both capital sources provided 15-year, interest-only terms, with our client ultimately deciding upon a life insurance company execution,” David Sonnenblick, Sonnenblick-Eichner Co. principal, said in a prepared statement. “Due to the low interest rate associated with this financing, our client chose to incur the prepayment associated with defeasing their existing loan.”

The park was constructed in phases beginning in 1989 and is owned by AIPA Properties LLC. The property has Class A office space, telecom/data flex space and both light and high-cube warehouse space with 38-foot clear heights. The complex is 99 percent leased to a diversified list of tenants that includes Hawaiian Airlines, AT&T Corp., Budget Rent-A-Car, the City and County of Honolulu, the state of Hawaii and Lockheed Martin Corp.

Patrick Brown, also a Sonnenblick-Eichner principal, noted this was the third time the Beverly Hills, Calif.-based real estate investment banking firm had financed the asset for the borrower.

The company specializes in arranging structured finance for acquisition, construction and permanent loans, interim and mezzanine financing, as well as joint venture equity transactions.

Sonnenblick-Eichner’s recent refi deals focused on hotels

Last month, the firm arranged $135.8 million of non-recourse, first mortgage financing for 11 Memphis-based Cooper Hotels’ properties totaling about 2,000 guestrooms in Florida, Michigan and Tennessee, all branded by Hilton. The 5-year floating rate loan was underwritten to a 70 percent loan-to-value and was interest-only for the entire term.

Another big hotel refinancing transaction occurred earlier this year when the firm arranged $92 million in first mortgage debt to refinance a portfolio of four hotels—three East Coast and one in Austin, Texas—with a total of 592 guestrooms. The January refinancing consisted of four separate non-recourse, non-cross-collateralized loans from three different lenders. A money center commercial bank provided a 10-year, fixed-rate financing for each of two Hyatt House properties and LIBOR-based floating rate financing from two regional banks for a Hilton Garden Inn in Albany, N.Y., and the Archer Hotel in Austin.

In spring, Sonnenblick-Eichner also secured $41 million in mortgage financing for Hotel Eastlund, a 168-key hotel in Portland that received a 10-year, fixed-rate loan from an international money center bank.

Image courtesy of Sonnenblick-Eichner Co.