A Tokyo developer with “incredibly awful timing” has sold its last piece of choice real estate on Guam — beachfront in Tumon for $115 per square meter.
“We were quite surprised that Tokyu would sell the land at this time after sitting on it for almost 40 years ” said the president of a family partnership which has acquired the largest of four remaining undeveloped beachfront properties on Hotel Row in Tumon Guam.
Fong S. Wu president of CBA Development LLC a partnership of Wu family members in Taiwan and Guam said he strongly recommended the deal to his relatives. “I don’t think it will ever go lower in price than this. We will let it sit for at least a year or two during which time I am definitely confident the value will go up.” He said he expects it will be developed into a huge hotel.
Tokyu Micronesian Development Corp. sold the 41 659 square meters which equates to about 10 acres and is between Ypao Beach Park and Pacific Islands Club to CBA Development for $4.8 million.
CBA Development was formed specifically to acquire the property. Tokyu was asking for $6.3 million but accepted the offer on March 23 after failed negotiations with a consortium of local businesspeople who wanted to build luxury homes on the beach. The deal closed and was recorded on May 20 after 60 days in escrow.
“We will let it sleep for awhile ” said Wu president of Sunny Plastic Guam Inc. “Hospitality is not our business so we have not made our minds up how to go forward with development of the property. We will do a feasibility study within six months.”
Wu said the largest shareholder in CBA Development LLC a senior family member who is involved in a financial company in Taiwan asked not to be identified or interviewed. Family associates said he visited Guam in April stayed at the adjacent PIC Guam and looked at the property. Documents for the limited liability company which were filed on May 17 list in order the partners and their capitalization shares as: Benson Wu $150 000; Great Sun Trust $150 000; Shiu-Fong Lai Wu $150 000; Arasi Guam Corp. $300 000; Chuan-Chuan Wu $60 000; Ing-Ing Wu $60 000; Jan-Jan Wu $60 000; Ling-Ling Wu $60 000; and Chia-Ban Investment Co. Ltd. $2 million.
David J. Ulloa president of Pacific Rim Realty which represented Tokyu in the sale said his client sold the property because “It was time to leave Guam. Tokyu Corp. is reorganizing and Guam is not in their picture. The Japanese were motivated to go and this was their last property here.”
Tokyu Micronesian whose parent company is Tokyu Dentetsu of Tokyo once owned other properties on Guam and had an affiliate Guam Pacific Tokyu Construction Co. Ltd. which built the Mangilao Golf Course Hotel Nikko Guam the newest PIC Guam tower and the First Hawaiian Bank in Maite. Tokyu Construction was named 1992 Contractor of the Year by the Guam Contractors’ Association for work on the golf course and Nikko. Tokyu Construction first came to Guam to build the Tokyu Hotel on the same Tumon beachfront property which Tokyu Micronesian Development purchased from the late Sen. Joaquin Perez in 1968 for less that $20 per square meter. Tokyu Construction a subsidiary of Tokyu Construction Corp. of Tokyo built and owned Nimitz Towers in 1974 and sold them in August 1999. Tokyu also sold the Sunflower Villa to Dr. Kia M. Rahmani in April 2003 for about $1.5 million another buyer’s bargain.
The Tokyu Hotel opened in the early ‘70s but did poorly and closed. In April 1975 with the fall of Saigon the Tokyu beach property became a staging area in Operation New Life the housing of 112 000 refugees from South Vietnam in temporary camps around Guam. In the early ‘80s the property was leased to PIC Guam during its transition from bungalow hotel rooms to high-rises.
“Tokyu was a company that became known on Guam for their incredibly awful timing ” said Tom Clark a real estate agent whose Blue Pacific Realty managed some of Tokyu’s properties including the beachfront. He said the company somehow missed market swings in acquiring developing and selling.
“To be honest with you Tokyu was offered as much as $2 000 per square meter for the land in the boom times ” Ulloa said. “But real estate is something where you can’t look back or you’ll go crazy. They lost out in the boom times but they received a fair price under the present situation.” The $4.8 million purchase price works out to about $115 per square meter.
W. Nicholas Captain president of The Captain Co. a real estate consultant said CBA Development found a great bargain on the best potential hotel site left in Tumon. “Quite honestly the pendulum had swung too far in the negative direction. We will see land appreciation certainly over next three to five years.” Captain said land in Tumon sold for about $1 000 per square meter in the mid-1980s the market’s peak years.
“It is the largest hotel site left ” Captain said. “Other sites have significant development issues to overcome. This property is a rectangle with substantial beach frontage. It’s as ready to go as a hotel site could possibly be.” He said the other remaining potential hotel sites are the former Fujita property which is divided by a bull-cart trail; Guma Trankilidat which was developed as a low-density government retirement-home property; the former Royal Palm Hotel site; and some parcels next to the Guam Hyatt that could be collected into a hotel property.
In snagging the Tokyu property CBA Development topped an offer from Ellen’s Realty representing a consortium of eight prominent local businesspeople who wanted to subdivide it build homes on the beach and develop the rear portion. They made an offer to purchase the Tumon property for $4.5 million. “It breaks my heart to talk about it ” said Ellen J. Wilkinson principal broker but we still have our money and can buy something else.” MBJ