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!
Last week, the Howard Hughes Corp. broke ground on the Central Plaza at Ward Village. It will be a beautiful green space in the middle of the towers where residents and non-residents alike can enjoy outdoor movies, live music, yoga classes and more. Janis Magin writes in Pacific Business News, “The first phase of the plaza is being built with grass and native landscaping on a 1.5-acre space next to the Ward Entertainment Center that until recently was home to warehouse buildings…The park space, which was one of the requirements set by the Hawaii Community Development Authority as a condition for its development permits, is scheduled to open in January 2019. The developer did not disclose the cost of the project.” We believe this plaza and the park that they’re creating is a game changer for Ward Village. It will attract so many people to the area; both as a place to live and a place for recreation or retail. It’s also great to see that the plaza will be finished before all the towers are completed. It shows that the company is focusing on the community, the neighborhood, and its residents before thinking about themselves.
Besides the groundbreaking, Howard Hughes has generously donated $100,000 to a new fund administered by the Hawaii Community Foundation. This money will go to residents of the Big Island who have been displaced by the eruption of the volcano as well as residents of Kauai struggling from the floods in April. It’s so nice to see a company of this size give back to its own community. Besides just giving money, they’re creating a space for the residents and visitors of Oahu to enjoy. We can’t wait to see their progress on this project!
Last week, Hawaii News Now reported that airlines are adding over a million seats on flights to Hawaii in the month of May. This means more potential for tourism and growth in the economy. It’s a great indicator that there is a lot more business to come over the summer months and could be profitable for many businesses and industries. They reported that most of the seats will be for neighboring island flights, which continues trends in business that we’ve noticed over the last year. There is a lot of potential for growth and new developments on the neighboring islands, something that these airlines are noticing as well. We are very excited about this growth and the potential boost for our islands’ economies. Let us know your thoughts in the comments!
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.