While I was in New York City for a conference, I was able to visit clients and customers to take their temperature on our Hawaii real estate market place. I did get somewhat of a consensus from the major players. The first half of 2009 was spent taking care of their problems. In only one case did that result in a property potentially going back to the lender. Many of the loans on the larger Hawaii properties were renegotiated and extended during the first half of 2009. It was clear that these entities are not going to throw good money after bad. However, with the extension of the loans, they seem to be willing to ride out the storm and plan to get back to similar values in 5-8 years.
Hawaii Commercial Real Estate
Another similar circumstance amongst these owners is that they are ready to dive back in and invest. Several have funds left over from pools that they raised publicly in 2006 and 2007, which have not yet been spent. Others have new money that they have raised targeting “distressed assets”. They are studying the problem assets in Hawaii, primarily hotels, and already deciding amongst themselves which ones are they interested in and which ones they won’t waste their time on. Wall Street still has a strong appetite for Hawaii real estate.