Local developer Peter Savio plans to convert and expand an Aiea office building into a business condominium for medical professionals in a roughly $45 million endeavor.
Savio recently bought the low-rise Newtown Square office complex from Kamehameha Schools for $15 million, and plans to spend another $30 million on renovations and new construction of office space and a 300-stall parking garage.
Doctors, dentists and other medical professionals wanting to own space in their own building already have committed to the roughly 80 to 90 units that will be available, Savio said.
"It’s basically sold out," he said.
Construction is projected to start as early as January on the expansion, which will add a four-story building with 40,000 square feet of space to the existing three-story structure containing 60,000 square feet of space.
Savio said demand was strong from doctors leasing space in hospitals that he said can create conflicts over where patients are referred.
"They’re unhappy in the hospitals," he said. "Doctors are saying, ‘We want to stay independent.’"
The condo conversion is expected to gradually take place over the next four years as the new building is completed and leases expire for existing tenants who either declined to buy or weren’t offered a unit because they aren’t in the medical profession.
Savio said nearly every medical tenant opted to buy their space, though several other businesses including a travel agency, veterinary clinic, insurance agency and law office will need to relocate.
Michael Bruce Zafrani, a doctor with a psychiatry practice at Newtown Square, isn’t happy with the conversion plan because he doesn’t want to invest in an office condo a few years ahead of planned retirement.
Zafrani’s lease expires in June, and he expects to have to relocate at considerable expense. "It’s not an easy thing," he said. "It’s a real hardship. We’re being squeezed out. We were loyal tenants here for 30 years."
Savio is selling most units, which average 1,000 feet, for $400,000 to $500,000. He said the redeveloped complex will feature more medical services including a surgery center, and feature a food court on the roof.
A group of doctors buying units convinced Savio to rename Newtown Square the Mary Savio Medical Plaza at Newtown after his late mother, the developer said.
"I’m going along with it, but I’m still a little uneasy with it," he said.
Savio believes there is much more demand for medical office condos, and said he is interested in developing similar projects in the Kapolei region and in Honolulu if he can find suitable properties.
