Queen Liliuokalani Trust, which earns 70 percent of its revenue from Waikiki holdings, plans to diversify by offering the fee interests to Foster Tower and reoffering fees at three other nearby condominiums.

The offering, which started on Saturday, comes a decade after the alii trust declined to sell its fee-simple interests in Foster Tower to eight of 142 residential lessees who had petitioned the city to use its eminent-domain powers to force leasehold conversion.

The trust’s earlier decision not to sell was supported during a protest march through Waikiki and a rally at Iolani Palace and was backed by the Office of Hawaiian Affairs and other Hawaiian advocacy groups.

"We didn’t want to be under the situation where we would be forced through condemnation to sell our fee-simple interest," said Thomas K. Kaulukukui Jr., chairman and managing trustee of the Queen Liliuokalani Trust. "We are very positive about the fact that now we are able to make our own economic decision for our beneficiaries at the time that is most appropriate for us."

Over the years, the trust has declined several offers from Foster Tower owners to convert the condominium to fee-simple. Kaulukukui said the trust’s latest decision was influenced by the fact that its revenue-producing lands are concentrated in the 16 acres that it owns in Waikiki. In addition to the four condominiums, the trust also owns the land under the Marriott Waikiki Beach, the Pacific Beach Hotel and the Hilton Waikiki Beach Hotel.

"There’s some risk involved when 70 percent of your revenues come out of one area," he said. "Envision the picture of the tidal wave coming over the sea wall in Japan and then envision that it’s Kalakaua."

The timing of this offering, which will be handled by Hawaiian Island Homes Ltd., is favorable for lessees and for Queen Liliuokalani Trust, Kaulukukui said.

"Lessees will have the opportunity to purchase their fee and avoid the possibility of being evicted at a time when mortgage rates are at 3.9 percent," he said.

It’s also favorable for other Waikiki leasehold owners who are pushing for legislation that protects their interests, said Helen Carroll, who belongs to Citizens for Fair Leasehold Housing and is fighting to buy the fee-simple interest to the leasehold unit that she owns in the Kalia condominium on Ena Road owned by the Woolsey Family Trust.

"I think this is great. It sends a message to other lessors to wake up," Carroll said.

Leases for some 39 leasehold buildings on Oahu will expire between now and 2018, she said.

"The leasehold situation is very frightening. All of us are very concerned," Carroll said.

Leases at Foster Tower are set to expire in 2034 and will expire in 2035 for the Waikiki Banyan, in 2036 for the Waikiki Sunset and in 2039 for Liliuokalani Gardens at Waikiki, according to data from Mike Pang, principal broker of Monarch Properties.

Cash raised from the sale of Foster Tower units and from the reoffering of fee-simple interests in the Waikiki Banyan, the Waikiki Sunset and Liliuokalani Gardens at Waikiki will help the trust move into a more secure future, Kaulukukui said.

"We will take some money out of Waikiki to use for programs and for developing some other lands with the funds," he said.

Previous offerings at the Waikiki Banyan, the Waikiki Sunset and Liliuokalani Gardens at Waikiki successfully converted more than 80 percent of the leasehold apartments into fee-simple units, according to Peter Savio, who is selling the land beneath the four properties on behalf of the Queen Liliuokalani Trust.

Given the short lease, conversions at Foster Tower should be robust, Savio said.

"The condominium is in absolute leasehold decline. At this point the only solution is for an owner to buy the fee or renegotiate a new long-term lease," he said.

Savio anticipates that fee demand from Foster Tower owners will be high. Price may be a factor for those that decline, he said.

"It’s not cheap," he said. "This is a valuable asset on Kalakaua with an unobstructed ocean view."

Leasehold sales listings in the building ranged Friday from $175,000 for a studio to $779,000 for a one-bedroom with a spectacular view.

"If the owners had the fees, those prices would easily double," Savio said.

Lease rates for the four properties were not immediately available.