A struggling complex of warehouse condominiums built two years ago in Waipio failed to sell at a foreclosure auction yesterday, resulting in a mortgage lender repossessing the property.

Local real estate development firm The MacNaughton Group took a shot at bidding for the property — 70 unsold units at Waipio Business Center — but wasn’t willing to pay more than $20 million.

The company started off the bidding at $17.85 million and was countered three times by GE Business Financial Services Inc., which provided a loan to help develop the complex.

GE Business essentially used the value of the bad loan as credit to submit the high bid of $20 million.

Steve Metter, a local developer representing GE Business, said it is possible that the lender will make units available for individual sale, though other possibilities for the property are in play.

"We’re in the process of studying all our options," he said.

WIC Partners LLC, a local partnership led by Samuel Chung, Serge Krivatsy and David Bierwert, developed Waipio Business Center, with 99 units, two years ago for an estimated $60 million.

The complex was one of several Oahu warehouse projects that developers rushed to build when Hawaii’s economy was hot and new warehouse space was in high demand.

But the market turned sharply down at the end of 2008, and WIC ran into difficulty after selling just 27 of the 99 units that year for close to $22 million — an average of just under $800,000 per unit.

The developer offered deals for buyers and also made units available for lease but did not sell any units last year, according to property records. Industrial real estate brokers said at the time that there were many interested buyers who could not obtain financing. Demand also shrank as businesses began downsizing.

GE Business filed its foreclosure lawsuit a year ago, claiming WIC defaulted on its loan. Since then one unit was sold, and one in escrow was withheld from yesterday’s auction.