Savio buys 3 more buildings for students
Peter Savio is expanding his real estate empire to control more than 1,000 student beds around the University of Hawaii.
Savio confirmed that he is buying three buildings in Moiliili to convert them into housing for 200 students. He would not disclose the sales prices or the addresses of the buildings until he can tell the existing tenants of the purchase.
Savio was aiming to convert the apartment buildings into dorms for students in time for the start of the fall semester, but delays in closing the deal will likely push that back until fall of 2007.
"I don't think it's fair to existing tenants to give them a 45-, 60-day notice to move," Savio said. "For these people it's going to be a very traumatic experience."
The Moiliili purchases are in addition to projects already under way by Savio's company, Hawaiian Island Development Co. Inc. He is presently converting The Ohia apartments on Kuhio Avenue in Waikiki to apartments for up to 600 students to be ready on July 1. Waikiki is a little over a mile from the Manoa campus, a quick bus ride or about a 20-minute walk.
The company also owns Kalo Terrace Student Suites in Manoa and Hana Student Suites on Koa Avenue in Waikiki, which was converted into student housing last October. The two privately operated buildings combined have 370 beds.
Savio plans to convert more Waikiki buildings into student housing, adding another 1,000 beds next year. Texas-based Century Campus Housing Management will manage the properties.
"The university is one of the best buys in education in the country today," Savio said. "The one weakness it has right now is they don't have the dorms."
UH-Manoa, which has about 20,000 students, has housing for about 3,300 students while more than 1,000 students are placed on a waiting list each year.
The university's target over the next five to seven years is to house a third of the student population, or roughly 7,000 students, on campus, said Jim Manke, UH-Manoa spokesman.
"There is a definite need for more housing options for our students, and it is in our best interests to encourage these kinds of private housing initiatives while we move ahead with our own plans for on-campus facilities," Manke said.
UH plans to demolish Frear Hall next month to make way for construction of an 800-bed high-rise dormitory opening in fall 2008. Construction costs are estimated to be as high as $60 million.
But Savio says the university shouldn't be building dorms on the space-restricted campus. Instead, UH should convert the existing dorms into classrooms, labs and offices for faculty.
"Let private industry build the dorms," he said.
The average monthly rent for a UH-Manoa dorm student is about $450, compared to the $650 Savio plans to charge per student, or $1,000 market rent for a private studio. Typically, two students share a studio.
The dorm management company will hire resident assistants and offer student programs and activities such as beach excursions year round.
Savio is building a niche in student housing because he believes UH and other local universities have an opportunity to attract more foreign students from places like China and India, where economic momentum is building.
"The university is not preparing for that growth," he said.
In addition, he aims to help create more affordable housing for local families in neighborhoods like Makiki, Manoa and Moiliili by getting students out of the rental market.
Savio's goal is to add 3,000 beds over the next three years to the student-rental market.