The Bratton Team sold the Luana Land at Honua Kai to Ledcor in August of 2017. Since the purchasing of the property, Ledcor has named the development’s townhome project, The Luana Garden Villas. It sits on 10 acres in the Honua Kai Resort & Spa on Maui and has sold out more than half of its 72 units since launching sales earlier this year.
The project is being built in “enclaves” of multiple two-story buildings, each containing four three-bedroom units, and is the last development in the Honua Kai Resort. Units in the first enclave are scheduled to be completed in the summer of 2019. Click here to read the full article.
The wording of a new constitutional amendment on education funding is making a lot of people in Honolulu uneasy because “it fails to mention that the proposed measure could result in a tax placed on a wide range of investment property” (Stewart Yerton, Honolulu Civil Beat). Critics from the City and County of Honolulu have come up with a lawsuit asking the election officials to change the wording because it is so vague. The title is merely: “CON AMEND: Relating to Public Education and Investment Property.” We all have a chance to vote on this issue in November and it’s very important that everyone comes out to vote. This could affect many commercial properties and change the real estate landscape in Honolulu, as well as throughout the state.
As Mr. Yerton writes in his article, “Honolulu Mayor Kirk Caldwell’s administration has said that the tax would have an adverse impact on Honolulu’s real estate market since it might dissuade potential investors from investing in higher-priced properties, driving rents up higher overall.” We at The Bratton Team want to make sure even if this amendment makes it on the ballot with the current heading, we know what it could mean for the real estate market on the islands. Let’s get out there and vote in November!
Earlier this week, it was announced that Jin Air will be partnering with Island Air to offer inner-island connections from Seoul, Korea. This Korean airline will also resume their flights from Honolulu to Seoul five times a week starting May 29th. They paused this route due to maintenance on their Boeing 777 but it will be up and running very soon. We, at The Bratton Team, feel this announcement is a big step forward for Hawaiian-Korean relations especially when it comes to the commercial real estate market. As of now, Korea is our second biggest foreign real estate buyer and we are so excited that there will be flights 5 times a week directly to Honolulu. That means a lot more opportunities to sell and deal with these foreign investors, which could move Korea up to the number one spot over the next 5-10 years.
Last year, the single biggest purchase in Hawaii commercial real estate was made by a Korean investment company and this announcement will only continue this trend. We’ve noticed that our Korean investors have become more aggressive in the island market, as well as markets across the US. This partnership seems like a step in the right direction because Jin Air is going to bring so many more possible investors directly into Honolulu and Island Air will be able to connect those investors to the other islands seamlessly. As Dave Segal wrote in the Star Advertiser, “The agreement, which goes into effect today, means customers traveling on Jin Air between Honolulu and Seoul can connect to a neighbor island on Island Air, booking the reservation on a single ticket and checking luggage through to their final destination. The two airlines will have three interline routes, including Incheon-Honolulu-Kahului, Incheon-Honolulu-Kona and Incheon-Honolulu-Lihue. Jin Air will start interline sales today.” It will be an easy booking process for these potential investors and tourists. We are excited for the opportunities for the commercial real estate market, as well as the opportunities for our economy and tourism on the islands! We can’t wait to see what great things this partnership will bring to Hawaii.
Last week, I was quoted in a Pacific Business News article about the former Federal Aviation Administration building on Kalakaua Avenue, which was recently sold to an undisclosed buyer. Myself, Brandon Bera, and Karen Birkett represented the sellers, New York’s Angelo, Gordon & Co. and Hawaii’s Pacific Office Properties Trust Inc, in this recent transaction. The building, which once held the Pacific Business News offices, is a likely candidate for redevelopment because it is located in the Waikiki Special Design District that allows new developments. I believe this property could be redeveloped into a hotel or a number of other retail or commercial opportunities.
Even in the event of a redevelopment, the buyers will be honoring all of the leases in place. The largest tenant is an international school called EF International. They have branches in New York, Oxford, and Torbay England. They occupy an entire floor of the building and moved into their space a couple of years ago. They were previously located in the Waikiki Trade Center, which has been transformed into the Hyatt Centric Waikiki. This was a similar redevelopment of an office or mixed-use building into a beautiful new hotel. Additional tenants include wedding planners, publishers, and architecture firms who like to have direct access to Waikiki and the Ala Moana area. It would make a wonderful hotel because of the proximity to the Hawaii Convention Center, Waikiki, and other tourist attractions in this area.
From Duane Shimogawa’s article, “Since the seller acquired the building in 2011, it has undergone extensive renovations totaling about $8 million. ‘This was a highly sought-after opportunity,’ Bratton said. ‘The property is conveniently located and highly visible at the entrance into Waikiki with excellent street frontage along the major thoroughfare, Kalakaua Avenue.’ Bera noted that the building is ideal for an investor looking for upside potential. The redevelopment of the former PBN building would make sense, especially since the Waikiki office real estate market has one of the highest vacancy rates on Oahu at 10.4 percent, according to Colliers.”
A few months ago, I wrote about the new timeshare developments all over the islands. As we see more progress on these resorts, we are noticing a concentration of timeshares on the Kona/Kohala coast of Hawaii. Besides the Hilton Grand Islander in Waikiki, Hilton is busy converting the Hilton Waikoloa Village from 601 hotel units into 450 timeshares. The Waikoloa Beach Marriott Resort & Spa is converting 240 existing rooms into 112 timeshare units just down the road from the Hilton. The Haupana Beach Prince Hotel just finalized the sale of 96 of their 35o rooms to an affiliate of Angelo Gordon & Co to be converted into new five-star residences. All of these timeshares on the northern coast of the Big Island are a great indicator of the market and things to come for this area of Hawaii.
By our calculations, this is almost 700 new timeshare units throughout these three resorts and they are being offered 52 weeks a year. This kind of availability is unprecedented and we are excited to see what new opportunities come out of these units. These resorts and developments will create new jobs as well as bring families and guests back year after year. Besides bringing more people to Waikoloa, these timeshares will also increase the hotel room occupancy rates in the remaining hotels in the region, which is traditionally the lowest occupancy in the state. With so many rooms being converted into timeshares, there are less hotel rooms available and so the occupancy rates will be driven up. It is exciting to see so much concentration on this part of the island. While being built and sold, which will take a while, most of these resorts have a contingency plan so their rooms will stay open and available during the transition. It will be interesting to see how quickly they can sell these timeshares and if quick sales will help to expedite the developments. We will keep an eye on all of these resorts and will keep you updated as they progress.
Stay tuned for more updates and leave your comment below to let us know what you think about all these timeshare developments!
This is a new feature on our website; we will be reviewing the previous month’s commercial real estate sales in Hawaii. We want to keep you up to date with what’s going on and make sure you get all of the information possible. Please email us if you want more information on any of these properties, deals, or our current listings.