A 2-year-old industrial condominium complex in Waipi'o is headed for the foreclosure auction block, a victim of the downturns in Hawai'i's economy and commercial real estate market.

The sale is scheduled for later this month, and involves 72 warehouse units at Waipio Business Center to be sold in bulk to pay off a loan used to develop the estimated $60 million project completed in 2008.

The 99-unit complex was one of several warehouse projects that developers rushed to build several years ago when Hawai'i's economy was hot and there was a shortage of ware-house space.

But the market turned sharply at the end of 2008, and the local partnership that developed Waipio Business Center, WIC Partners LLC, ran into difficulty after selling 27 of 99 units that year for close to $22 million, or an average of just under $800,000 per unit.

The developer offered special deals for buyers and also made units available for lease, but didn't sell any units last year, according to property records. Industrial real estate brokers at the time said there were many interested buyers who couldn't obtain financing because of the financial market turmoil. Demand also shrank as businesses began downsizing.

In June, lender GE Business Financial Services Inc. filed a foreclosure lawsuit, claiming WIC defaulted on a loan with an outstanding balance of about $35 million.

A judge in January ruled that GE Business could proceed with an auction, which is being handled by local real estate industry consultant Wendell Brooks Jr.

There is no upset price for the 72 units, which aren't available for individual purchase. In the past, the developer has listed the units for sale for $489,000 to $1.5 million, or close to $57 million in total.

GE Business could opt to assume ownership if no one bids more than $35 million, or sell them for a lesser amount if the lender is willing to accept less.

Two other industrial property foreclosures in recent months have had mixed results. In one case, lender iStar Financial repossessed the 93-unit Kapolei Spectrum II industrial condo project in West O'ahu from a California developer, and offered the spaces for lease under a new name, Kapolei Trade Center.

The other case involves the former Hawaii Raceway Park in Kapolei that a California developer tried to develop into a 90-lot industrial subdivision. The bad loan on that 66-acre property rezoned for industrial use was sold by iStar to Honolulu-based Alexander & Baldwin Inc., which used the $12.7 million loan debt to bid for the property at a preliminary foreclosure auction last month. A final auction is scheduled for March 18.

The auction for Waipio Business Center is scheduled for noon on March 24 outside the 'ewa entrance of First Circuit Court at 777 Punchbowl St.

Local commercial real estate firm Colliers Monroe Friedlander predicts that O'ahu's industrial property market will take a while to recover.

"O'ahu's industrial sector hit hard by the recession's impact continues to weaken as construction activity declines and retail sales fall," the firm said in its most recent market report at the end of last year.

Warehouse space vacancies on the island represented 4.8 percent of the market at the end of last year, which was up from about 2 percent in 2004 and 2005.

Colliers forecasts vacancies by the end of this year will rise to between 5.5 percent and 6 percent.