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.”
Let us know what you think about this possible redevelopment in the comments!