Pacrep to Revise Design for Ritz-Carlton Hotel Condo in Waikiki

By Adriana Pop, Associate Editor

The Honolulu Department of Planning and Permitting has granted conditional approval to the proposed $275 million Ritz-Carlton condominium hotel project in Waikiki. The Pacific Business News reports that before construction can begin, California developer Pacrep L.L.C. will need to revise the design of the 37-story tower known as 2121 Kuhio in order to reduce its apparent mass. The company has also been asked to consider an expansion of the commercial space planned for the building’s ground floor and redesign the entry along Kuhio Avenue.

In an attempt to mitigate the visual impact of the high-rise on the shoreline, Pacrep has already reduced the initial width of the project by 48 feet and added three additional floors. Earlier this year, the Honolulu City Council approved a height variance for the proposed 350-foot tower, which at this point exceeds the site’s standard limit by 50 feet.

Also known as the Ritz-Carlton Residences Waikiki Beach, the new development will feature 459 luxury condominium-hotel units with expansive ocean views. The Ritz-Carlton Hotel L.L.C. will brand and manage the residences, which will range in size from 400 to more than 3,000 square feet. Amenities will include resort pools, a spa, a fitness center, an owners’ lounge and storage, a gourmet food market, along with a cafe and restaurant.

Early in 2012, Pacrep purchased the vacant 1.4-acre project site at the corner of Kuhio Avenue and Kalaimoku Street for $15.5 million. The company expects to begin construction this year. Upon completion in 2016, the Ritz-Carlton Residences Waikiki Beach will be the area’s first new luxury condominium property since Trump International Hotel Waikiki Beach Walk opened in 2009.

According to the final environmental assessment, Pacrep plans to sell the units for more than $300 million. The prices of the condominiums range from $500,000 for a studio to over $15 million for a top-floor penthouse.

Photo credits: PACREP L.L.C.

Plans Move Forward for $72M Mixed-Use Project on Maui

By Adriana Pop, Associate Editor

The Maui Planning Commission recently approved the final environmental assessment for a $72 million mixed-use development in Kihei, one of the island’s most populated communities.

According to the Maui News, Krausz Cos. will not need to conduct a more extensive environmental impact statement for the 250,000-square-foot Downtown Kihei project.

The San Francisco-based developer is planning to build a village square; more than 200,000 square feet of office, medical office, retail and restaurant space; a 44,180-square-foot movie theater; a four-story, 150-room hotel; and more than 1,000 parking stalls.

The project will be developed between the Piilani Village Shopping Center and the Longs and Azeka’s centers on four parcels of land totaling 27 acres. Construction is expected to begin in the summer of 2015.

The company’s next steps will be to obtain a special management area use permit, as well as land-use entitlements. The Krausz Cos. will need to rezone a 2.6-acre parcel from business-commercial to hotel and obtain a height variance that would allow for the construction of a 60-foot movie theater. The developer is also conducting a study in order to come up with measures that would help address traffic congestion concerns.

In other news, the Pacific Business News reports that Alexander & Baldwin subsidiary A&B Properties will purchase the 10-story Clifford Center office building in downtown Honolulu from Pacific Office Properties Trust. The transaction is expected to close on April 17 for an acquisition price of $11.2 million.

In 2011, Pacific Office Properties acquired the approximately 77,700-square-foot property for $6.5 million. Earlier this year, the REIT sold the Bank of Hawaii Waikiki Center to Shoei USA Inc. for an undisclosed amount.

Photo credits: http://www.krauszcompanies.com

Howard Hughes Expects $66M Profit from ONE Ala Moana Condominium

By Adriana Pop, Associate Editor

In a letter to shareholders, Howard Hughes Corp. CEO David Weinreb predicted the ONE Ala Moana ultra-luxury condominium tower in downtown Honolulu will generate a profit of $66 million. The Dallas-based company is building the new high-rise in partnership with local developers Kobayashi Group and The MacNaughton Group, the Pacific Business News reports. The three entities have formed HHMK Development L.L.C. for the construction of ONE Ala Moana.

Expected to break ground this summer, the 206-unit tower sold out in just two days during the month of December. The project will cost approximately $900 per square foot to build, with the condominiums selling for an average price of $1.6 million, or approximately $1,170 per square foot.

The 23-story building will rise above the existing Nordstrom parking structure at Ala Moana Center. Upon completion, Howard Hughes’ first residential tower in Hawaii will offer one-, two- and three-bedroom homes ranging in size from 760 to 4,100 square feet.

Facebook Inc. founder, chairman & CEO Mark Zuckerberg purchased several multimillion-dollar residences in the upcoming condominium development, the newspaper reports.

Howard Hughes’ additional plans in Honolulu include development of the Ward Village master-planned community in Kakaako. Plans call for construction over 15 years resulting in two mixed-use residential towers, an affordable housing tower and the renovation of the IBM Building into a contemporary information and sales center. In October, the company announced that the first phase of Ward Village will consist of approximately 500 market-rate condominium units and at least 125 workforce housing units.

“While we have not yet determined pricing for our first-phase towers (at Ward Village), market data suggest that comparable existing ‘front row’ product with unobstructed ocean views re-sold in 2012 at an average price of approximately $1,400 per square foot,” noted Weinreb.

Construction on this phase of the master plan is expected to begin in 2014 and be complete by 2016.

Photo credits: http://www.onealamoana.com

Robertson Properties Group’s Mixed-Use Development Under Review

By Adriana Pop, Associate Editor

The Honolulu Department of Planning and Permitting is currently reviewing Robertson Properties Group’s plans for a $767 million, 1,500-home mixed-use project in Aiea. Called “Live, Work, Play Aiea,” the project will be developed across from Pearlridge Center, on the site of the former Kamehameha Drive-in property.

According to the Pacific Business News, the Los Angeles-based real estate developer is requesting the rezoning of nearly 14 acres of land from community business district to community business mixed-use district, which has a height limit of 350 feet. The area’s current limit is only 60 feet.

The “Live, Work, Play Aiea” development will also include about 143,000 square feet of retail and restaurant space, and as much as 80,000 square feet of office space. If approved, the project will generate a base economic impact of $2.4 billion. Construction is expected to create approximately 1,000 jobs per year during an estimated build-out period of 13 years.

Last fall, the original project was scaled back. Initial plans called for three 350-foot-high towers and two 60- to 80-foot buildings. The revised version, currently under review, proposes one 350-foot tower and four shorter buildings ranging in height from 150 to 300 feet. Plans may also include a 150-room hotel, the newspaper reports.

In other news, Holliday Fenoglio Fowler L.P. has been selected to market the Hotel Renew property in Honolulu on behalf of the seller, Z Tower L.L.C. The 72-room, fully renovated, designer boutique hotel is located at 129 Paoakalani Ave., one-half block from Waikiki Beach. Originally built in 1967, the nine-story property was completely renovated in 2008.

The HFF investment sales team representing Z Tower is led by managing director Holden Lim, senior managing directors William Stadler and Dan Peek, and managing director Scott Hall.

Photo credits: http://www.formpartners.com

Central Y Property Redevelopment Brings Condominiums, Smaller Facility

By Adriana Pop, Associate Editor

San Francisco-based MB Property Acquisitions L.L.C. is planning a new 150-unit condominium high-rise at the site of the current YMCA of Honolulu facility, as well as a smaller adjacent building that would better suit the needs of the nonprofit organization.

According to the Pacific Business News, the developer has asked the Department of Planning and Permitting to approve a zoning change that would allow for the development of a high-density apartment mixed-use tower with a height limit of 350 feet. The area’s current limit is only 150 feet.

Last year, MB Property Acquisitions purchased approximately 1.5 acres of the YMCA’s nearly 1.8-acre lot across from Ala Moana Center for an undisclosed amount. The non-profit is using the proceeds from the sale to fund the construction of its new building on the remaining land. Plans call for a three-story, 30,000-square-foot facility that will include a health-and-fitness center, a swimming pool, locker rooms and a youth center that will offer preschool, after-school and summer child care.

In order to clear the way for the new developments, the 60-year-old building at 401 Atkinson Drive will be demolished. Architects Hawaii Ltd. will design the project; Hawaiian Dredging Construction Co. will build it and Prudential Locations L.L.C. will market the condominiums. Construction is expected to be complete by 2016.

In regional news, Concierge Auctions has announced that a designer furnished a 1.33-acre estate in the Hualalai Resort on the Big Island that will sell at a live auction on March 18^th. The sale will be conducted in cooperation with Hawaii Life Real Estate Brokers.

Known as “Hale Ku Mana,” or “House of Spiritual Healing,” the 10,056-square-foot custom home includes five bedrooms, four of which have ocean views, and five-and-a-half indoor/outdoor bathrooms. The property also boasts a gourmet chef’s kitchen, a butler’s kitchen with a separate entrance, a garden with native rare Hawaiian plants and privacy walls, six ponds, an outdoor grill and a stone-tiled saltwater pool with unrivaled views of the ocean and the island of Maui.

http://www.buildingsearch.com/HI/honolulu/Land-Listings/401-Atkinson-Drive

Bank of Hawaii Waikiki Center Changes Owners

By Adriana Pop, Associate Editor

Shoei USA Inc. has acquired the Bank of Hawaii Waikiki Center from Honolulu-based Pacific Office Properties Trust Inc. and its Mainland partner. According to the Pacific Business News, NAI ChaneyBrooks represented the buyer in the transaction. Financial terms were not disclosed.

Located at 2155 Kalakaua Ave., near the Waikiki Beach Walk, this landmark nine-story property offers more than 150,000 square feet of office and retail space, along with 219 parking stalls. Its tenants include Bank of Hawaii, Starwood Hotels & Resorts, Aston Hotels, JTB Hawaii, 7-Eleven and Teddy Bear World.

Last May, the tower’s former owners put the property on the market for $38 million. Larry Taff, president & CEO of Pacific Office Properties, told the newspaper that the company’s partner, a group of Mainland investors, had an 83 percent interest in the building.

Pacific Office Properties owns 21 office properties in Hawaii and Southern California, including interests in 16 joint ventures comprising 4.3 million rentable square feet. The company’s holdings in Honolulu include the Waterfront Plaza and the Davies Pacific Center downtown.

In regional news, construction on the infrastructure of the Ilima at Leihano senior-living community in Kapolei is currently underway. The Pacific Business News reports that the project is being developed by Kisco Senior Living, a Carlsbad, Calif.-based company.

Construction on the first building of the new community could begin later this year. The 78,000-square-foot facility will be built on three-and-a-half acres and will include 84 independent- and assisted-living units, as well as a memory-care wing. The overall cost of this phase of the project amounts to $26 million.

Kiewit Building Group Inc. is the project’s general contractor, while Wilson Okamoto Corp. is in charge of engineering work. Group 70 International is the building’s designer, and Belt Collins is the landscape architect.

Mitch Brown, chief development officer for Kisco Senior Living, told the newspaper that the units will be rented on a monthly basis. The developer is currently seeking partners to build medical office and clinic space, as well as a retail portion and a hotel on the rest of the project’s 20 acres that is available for development.

Photo credits: www.pacificofficeproperties.com

Planned 459-Key Condo-Hotel in Waikiki Gains Preliminary Approval

By Adriana Pop, Associate Editor

The Honolulu City Council has approved a height variance for the proposed $275 million Ritz-Carlton condominium hotel project in Waikiki. According to KHON, the 350-foot tower planned for a vacant 1.4-acre parcel at the corner of Kuhio Avenue and Kalaimoku Street will exceed the site’s standard limit by 50 feet.

Pending final approval from the city’s Department of Planning and Permitting, the project is expected to break ground toward the end of this year. Upon completion in early 2016, the Ritz-Carlton Residences Waikiki Beach will be the area’s first new luxury condominium property since Trump International Hotel Waikiki Beach Walk opened in 2009.

Developed by Los Angeles-based Pacrep L.L.C., the 37-story high-rise will feature 459 luxury condominium-hotel units with expansive ocean views. Early last year, the company purchased the project site for $15.5 million. According to the final environmental assessment, Pacrep expects to sell the units for more than $300 million.

The Ritz-Carlton Hotel L.L.C. will brand and manage the residences, which will range in size from 400 to more than 3,000 square feet. Amenities will include resort pools, a spa, a fitness center, an owners’ lounge and storage, a gourmet food market, along with a cafe and restaurant.

“We are thrilled to be bringing the world’s best hotel and residences brand to Waikiki,” said Pacrep manager Jason Grosfeld. “The Residences will further secure Waikiki’s position as a world-class destination, providing full- and part-time residents, as well as visitors, with all the legendary services and amenities they have come to expect of The Ritz-Carlton brand.”

The new condo-hotel will be the luxury accommodation operator’s first presence on Oahu and its second venture in the Hawaiian Islands. The Ritz-Carlton Hotel Co. operates another hotel and residential suites in Kapalua on Maui.

Condo-hotels allow investors to purchase individual rooms, which are rented to tourists, while proceeds are usually divided with an on-site management firm. Owners may also opt to reside in or manage the condominiums themselves.

Photo credits: PACREP L.L.C.

Plans for the Future of Hawaii’s Pineapple Island Unveiled

By Adriana Pop, Associate Editor

Oracle Corp. CEO Larry Ellison is planning to revitalize Lanai’s hospitality industry by upgrading its existing properties and adding a third luxury hotel. According to the Pacific Business News, the island’s billionaire owner also intends to expand the 1.5-megawatt La Ola solar farm, invest in desalination technology and improve transportation to and from Lanai.

Kurt Matsumoto, head of business operations at Lanai Resorts L.L.C., described the initiatives involving the future of Hawaii’s Pineapple Island at a recent community meeting.

Called “Lanai — Today and into the Future, A Vision for Creating a Sustainable Lanai,” the plan includes renovations of the Four Seasons Resorts and The Lodge at Koele and Manele Bay, as well as the development of a new resort destination on the eastern side of the island.

In terms of renewable energy, Ellison intends to develop a solar farm large enough to power the entire island. The existing La Ola solar farm currently supplies 10 percent of Lanai’s power needs. Plans also call for the use of electric vehicles and the construction of charging stations.

Additional priorities for the future of Lanai include a broader range of healthcare and housing options, small-business development, commercial agriculture, conservation activities, as well as the creation of a research center that would promote sustainability. Ellison also aims to improve the presence of the University of Hawaii’s Maui Community College on Lanai and create “the best school in Hawaii.”

The island is currently involved in a six-month community plan process, which is part of Maui County’s general plan. The next community meeting will be held next month, the newspaper reports.

Last summer, Ellison bought most of Lanai from Castle and Cooke Chairman David Murdock for an estimated $500 million.

Photo credits: www.fourseasons.com/manelebay

A&B Properties Acquires West Oahu Shopping Mall for $29.8M

By Adriana Pop, Associate Editor

A&B Properties Inc., the real estate subsidiary of Honolulu-based Alexander & Baldwin, has acquired the 170,275-square-foot Waianae Mall in Leeward Oahu from TNP Strategic Retail Trust Inc. The $29.8 million purchase price included the assumption of a $19.7 million mortgage, at a 5.4 percent interest rate.

“The Waianae Mall acquisition redeploys proceeds realized from a July 2012 land sale, on a tax-advantaged basis, into a favorably priced, significantly higher income-generating commercial property on Oahu,” said Christopher Benjamin, A&B’s president & COO.

Located 32 miles west of downtown Honolulu, the 10-building retail center on the Waianae Coast serves an area of approximately 35,000 residents. It was built in 1981 and it is anchored by a Long’s/CVS drugstore and a City Mill hardware store. The property’s additional tenants include American Savings Bank, Bank of Hawaii, Burger King, Goodyear Tire, Jamba Juice, Pizza Hut, Radio Shack and Starbucks.

The Waianae Mall’s new owner has already secured a lease agreement with a tenant that will boost occupancy at the center from 79 percent at closing to 93 percent. The lease becomes effective in February.

“We’re thrilled with the opportunity to provide retail options for Waianae’s growing community and to be reinvesting in Hawaii, a market we know best.  We plan to revitalize the mall and restore it as an important retail and community center for Waianae residents,” Benjamin added.

In a separate transaction, A&B Properties Inc. sold the Northpoint Industrial property in Fullerton, Calif., for $14.9 million. The two-building industrial facility offers 119,400 square feet of space. The company now plans to reinvest the proceeds from this transaction into an income-producing property in Hawaii via the 1031 exchange process.

Photo credits: www.loopnet.com

State Agency Green-Lights Student Housing for Aloha Tower

By Adriana Pop, Associate Editor

Hawaii Pacific University (HPU) has gained approval from the Aloha Tower Development Corp. (ATDC) to repurpose the Aloha Tower Marketplace in downtown Honolulu into a 300-unit student dormitory and multi-use complex.

According to the Pacific Business News, the $30 million project to create a 160,000-square-foot, two-story waterfront marketplace would put student housing on the upper floor, with retail, dining and entertainment options on the first floor.

“We’re delighted with the actions taken today by ATDC and excited about our ability to move forward with a project that we believe has tremendous implications for the university, for our downtown merchants and community, and for all of Honolulu,” said HPU President Geoffrey Bannister on the occasion of the announcement.

The university now plans to pursue permits and seek bond financing. Demolition and renovation could begin later this year, with completion scheduled for the fall of 2014.

The Aloha Tower Marketplace sits on state-owned land. Last year, the property was purchased by Ed Bushor, the founder of eRealty Fund, through an entity called Hawaii Lifestyle Retail Properties. AREA Property Partners sold the marketplace for $14 million. Through the entity, HPU now owns 80 percent of the project, while Bushor owns the other 20 percent.

In other news, the Hilton Hawaiian Village Waikiki Beach Resort has completed a seven-month, $25.5 million refurbishment of its beachfront Alii Tower. The renovation included upgrades to the property’s 322 guest rooms, a reconfiguration of its 12 suites and lobby, as well as new bathrooms and corridors.

Hilton Hawaii Area Vice President Jerry Gibson told the Pacific Business News that the new design maintains the Alii Tower’s tradition of grandeur, while also creating a vibrant, modern look. Ann Matsunami, partner at Pacific Asia Design Group in Honolulu, along with Jonathan Staub of Philpotts & Associates were the project’s designers.

Photo credits: www.alohatower.com

Alexander & Baldwin Completes Construction of Hawaii’s Largest Solar Farm

By Adriana Pop, Associate Editor

Alexander & Baldwin Inc. (A&B) and Kauai Island Utility Cooperative (KIUC) have recently announced the completion of Hawaii’s largest photovoltaic energy plant. The six-megawatt solar farm is located on Kauai’s sunny south shore, on a 20-acre parcel of land owned by A&B near KIUC’s Port Allen Station power plant. Electricity from the facility began flowing on Dec. 7.

Developed and operated by A&B subsidiary McBryde Sugar Co., the project is expected to generate approximately 10,200 megawatt-hours of electricity per year. KIUC and its members will be provided with renewable solar energy at a fixed rate for at least the next 20 years.

“The Port Allen Solar facility, along with our existing hydroelectric facilities at Wainiha and Kalaheo, will generate nearly 40,000 megawatt-hours of clean, renewable energy each year, making A&B the leading generator of renewable energy on Kauai,” commented Christopher Benjamin, president & COO of A&B, in a statement.

“Completion of this facility represents a significant step forward in KIUC’s portfolio approach to meeting our aggressive long-term renewable energy goals. By utilizing a portfolio of solar, hydroelectric and biomass fueled projects and a combination of both cooperative and independently owned facilities, we believe we will be able to meet at least half of Kauai’s power needs with renewable sources by 2023,” said David Bissell , president & CEO of KIUC.

Bissell also stated that the Port Allen facility is the first of three utility-scale solar photovoltaic projects that will come online on Kauai over the next two years.

“The A&B solar facility will supply almost 10 percent of KIUC’s daytime electrical load and annually produce about 3 percent of the total energy used on Kauai. By 2015, KIUC expects to draw 50 percent of its daytime electrical load from PV systems, the highest percentage of solar on any grid in the U.S.”

Headquartered in Lihue, KIUC is a not-for-profit generation, transmission and distribution cooperative owned and controlled by the members it serves. Currently, it comprises more than 32,000 electric accounts throughout the island.

Photo credits: www.fodors.com

Forest City Hawaii to Develop 690 Pohukaina Mixed-Use Project in Honolulu

By Adriana Pop, Associate Editor

Forest City Hawaii has been selected by the Hawaii Community Development Authority (HCDA) to develop the $500 million “690 Pohukaina” mixed-use project in Honolulu’s Kakaako neighborhood.

According to the Pacific Business News, the developer has proposed the construction of 800 workforce rental housing units on the state-owned parcel located at 690 Pohukaina St. Pending further approvals, the public-private project could include Hawaii’s tallest building at 650 feet. Plans also call for a commercial and civic building, a parking structure, a business incubator and offices for the state’s library system and Friends of the Library.

The state agency told the newspaper it had selected Forest City’s proposal to develop rentals because it presented less financial risk than the competing bid submitted by the other finalist, Lend Lease. The Australian developer intended to sell the units as condominiums.

The 690 Pohukaina project will be designed as a transit-oriented development, optimizing access to multiple forms of public transportation. Construction could start in 2015 or 2016, with completion scheduled for the summer of 2019. The state agency estimates that the new development would create 500 construction jobs and as many as 1,000 indirect jobs.

In other news, Queen’s Health Systems has acquired the former Hawaii Medical Center West campus from St. Francis Healthcare System of Hawaii. The company expects to spend more than $70 million on the property’s acquisition and improvements. Upon completion in 2014, the new campus will reopen as Queen’s Medical Center – West Oahu.

“Transferring the ownership of the West Oahu hospital assets to Queen’s is an important milestone for St. Francis,” Jerry Correa, St. Francis president & CEO, said in a press release. “We recognize the critical need to reopen hospital and emergency services in West Oahu.”

Photo credits: Forest City Hawaii

State Agency Green-Lights $200M Condo Project in Downtown Honolulu

By Adriana Pop, Associate Editor

The Hawaii Community Development Authority has unanimously approved the construction of a $200 million condominium skyscraper on the site of the former Honolulu Advertiser building.

The 46-story tower proposed at 801 South St. will be the first high-rise condo project in Kakaako in which all of its 635 units are designated “workforce housing.” Construction and sales are expected to begin by mid-2013. Upon completion in 2015, the project will offer a mix of studio, one- and two-bedroom units priced between $250,000 and $550,000.

According to the Pacific Business News, Honolulu-based Downtown Capital L.L.C. will develop the all-affordable condo high-rise. The team working on the project also includes general contractor Hawaiian Dredging Construction Co., architect Kazu Yato AIA & Associates Inc. and the real estate brokerage firm Marcus & Associates Inc.

“The project is designed to meet the critical shortage of affordable housing in the urban core of Honolulu,” said Downtown Capital head Marshall Hung. “With our design and construction team sharing this affordable housing goal, this community need can be fulfilled.”

According to Colbert Matsumoto, a principal with South Street Towers, which is a member of Downtown Capital L.L.C., the project is feasible because of rules established in 2011 by the Abercrombie Administration to facilitate the construction of workforce housing in Kakaako.

“Our project is fully aligned with the state’s vision to revitalize Kakaako by making it more accessible to middle-income buyers who previously lacked enough affordable housing inventory in that district,” Matsumoto said. “People who work in the area at hospitals, car dealerships, government entities and retail businesses will now be able to afford to buy a home within walking distance to their workplace.”

If demand is strong, Downtown Capital intends to develop another high-rise of 400 affordable-housing units on the property adjacent to the site of the current project.

In August, the company purchased the former Honolulu Advertiser building from Gannett Co. for $23 million. For the past two years, CBS Productions has been using the facility as a soundstage for the “Hawaii Five-0” television series. The network has an agreement to use the space until it wraps filming the third season next spring.

Photo credits: Jamm Aquino via Star-Advertiser

Waihonua at Kewalo High-Rise Receives Financing

By Adriana Pop, Associate Editor

Alexander & Baldwin has announced that a portion of the $206 million cost of the planned Waihonua condominium high-rise in Honolulu will be financed through a $120 million construction loan from First Hawaiian Bank, Wells Fargo Bank, Bank of Hawaii and Central Pacific Bank.

Alexander & Baldwin’s subsidiary Waimanu Development L.L.C. is part of a consortium developing the high-rise under the name Kewalo Development L.L.C. and also including N1189 L.L.C., Armstrong Homes Ltd. and BSC Waihonua L.L.C., which is owned by BlackSand Capital Management, according to the Pacific Business News.

Alexander & Baldwin subsidiary Alexander & Baldwin Properties Inc. is guaranteeing as much as $20 million of the loan. The consortium has already begun construction on the the 43-story, 341-unit condominium tower in Kakaako. The building is being developed on a 1.73-acre site located between the Hawaiki and Koolani towers that was purchased in 2010 for $16 million.

Upon completion in approximately two years, the Waihonua condominium high-rise will offer one-, two- and three-bedroom units that will be priced at $400,000, $565,000 and $720,000, respectively. Design Partners Inc. of Honolulu and Pappageorge Haymes of Chicago are the project’s designers.

In other news, Orthopedic Associates of Hawaii has signed a 10-year lease for as much as 20,000 square feet at Hale Pawaa in Honolulu. The company will occupy two floors when it relocates toward the end of 2013, the Pacific Business News reports.

Orthopedic Associates is currently located at the Physicians Office Building at The Queen’s Medical Center.

“Initially, we weren’t even thinking about relocating our practice, but once we experienced Hale Pawaa’s high-quality feel and learned that the owners would provide us with an architect to help customize our entire space, we knew this is where we wanted to be to grow our business,” orthopedic surgeon Darryl Kan told the newspaper.

The Hale Pawaa medical office building is owned by Healthcare Realty Trust. It opened in 2010 and is managed by CBRE Group Inc. Hawaii Region.

Photo credits: Alexander & Baldwin

Sheraton Hotels & Resorts Completes $230M Renovation of Hawaiian Properties

By Adriana Pop, Associate Editor

Starwood Hotels & Resorts Worldwide Inc. has announced the completion of an approximately $230 million renovation of four of its Sheraton properties in Hawaii.

The multi-year revitalization project included the $188 million renewal of the Sheraton Waikiki resort on Oahu. The 31-floor hotel features 1,636 renovated rooms, new landscaping and pools, redesigned convention facilities, as well as new restaurants and bars.

Sheraton Hotels & Resorts and the properties’ owners also invested $6.5 million in the renovation of the 508-room Sheraton Maui Resort & Spa, $16 million in the improvement of the 394-room Sheraton Kauai Resort, and $20 million in the remodeling of the Sheraton Kona Resort & Spa at Keauhou Bay.

With more than 400 hotels in 70 countries around the world, Sheraton Hotels & Resorts is Starwood’s largest and most global brand. Sheraton recently completed a $6 billion global revitalization of its properties, and is investing another $6 billion in global expansion over the next three years.

In other news, the Pacific Business News reports that the owner of the Turtle Bay Resort on Oahu has filed a supplemental environmental impact statement for the $770 million redevelopment of the 880-acre oceanfront property.

Plans call for two new hotels totaling 625 units, 590 new residential units and 160 workforce housing units to be developed over a period of 11 years.

The first phase of the expansion project could break ground in 2014 and includes the construction of 375 timeshare units and 225 residential units. Canada-based resort development firm Replay Resorts Inc. will develop the land, the newspaper reports.

Since 2010, the existing 443-room Turtle Bay Resort has been owned by a consortium of international investment management firms. The property’s expansion plans have been reduced by approximately 60 percent from an original 1985 master plan that called for the construction of 3,500 new hotel rooms and residential units.

Photo credits: www.bugbog.com

First Residents Moving into Kamehameha Schools’ Kakaako Development

By Adriana Pop, Associate Editor

Kamehameha Schools’ Six Eighty apartment project in Honolulu recently welcomed its first residents. The newly renovated building is located at 680 Ala Moana Blvd. in Kakaako and offers 54 loft-style units affordably priced for median-income workers. On the ground floor, the project also includes 8,600 square feet of commercial space.

Designed by Architects Hawaii, Six Eighty offers 42 studios and 12 one-bedroom units. The apartments are equipped with stainless steel appliances and feature designer touches like vinyl whitewashed floors, open-concept floor plans and 12-foot ceilings. Amenities include laundry facilities on each floor, two recreational rooms – a game room and a media room – and a recreational deck with barbecue and lounge areas. Rents range from $1,100 to $1,400 per month.

Six Eighty is the first major construction project of Kamehameha’s 15-year master-planned development in Kakaako. The developer plans to build a total of 2,750 residential units in a diverse community that will include a mixture of housing types, from street-level urban townhomes to work-live units and high-rise condominiums.

In regional news, a joint venture between an affiliate of Hyatt Hotels Corp. and an affiliate of Host Hotels & Resorts Inc. plans to develop and operate a 131-unit Hyatt Residence Club resort on Maui. The $40 million Hyatt Kaanapali Beach time-share project will also include a 6,500-square-foot open-air lobby with ocean views, a pool with a pool bar and a multi-level deck, a 3,000-square-foot fitness center, an owners’ lounge, a retail store and a 75-seat casual dining restaurant.

“Kaanapali Beach is one of Hawaii’s most beautiful areas, and we believe that Hyatt Kaanapali Beach, a Hyatt Residence Club, will be a highly sought-after addition to the Hyatt Residence Club system,” said John Burlingame, global head of residential development for Hyatt Hotels & Resorts.

Upon completion in 2014, Maui’s Hyatt Kaanapali Beach will be the first Hyatt Residence Club property in Hawaii. The company’s 15 other Hyatt Residence Clubs are located throughout the United States and Puerto Rico.

Photo credits: www.ksbe.edu

Ala Moana Center Redevelopment to Begin in Early 2013; New Residences Coming to Lahaina

By Adriana Pop, Associate Editor

The $543 million redevelopment of the Ala Moana Center in Honolulu is expected to start early next year, the Pacific Business News reports. The completion date has been set for late 2015, General Growth Properties Inc. said in a filing with the U.S. Securities and Exchange Commission.

The Chicago-based company plans to expand Hawaii’s largest shopping mall by replacing the current 340,000-square-foot Sears store with approximately 700,000 square feet of retail and restaurant space, including a three-level, 160,000-square-foot anchor tenant. Plans also call for a fourth-level parking deck.

In April, General Growth completed the acquisition of 11 Sears anchor pads from Sears Holdings Corp. for a total of $270 million. Under the agreement, the lease on the space at Ala Moana – one of the country’s most lucrative malls, with sales surpassing $1,300 per square foot – accounted for $250 million. Sears will continue to operate the store through the end of 2013, the newspaper reports.

In other news, Hawaii developer Stanford Carr is planning 203 residential units on a vacant 22-acre site along Front Street in Lahaina on Maui. The $60 million Kahoma Village housing project will be developed on land owned by The Harry & Jeanette Weinberg Foundation, the Maui News reports.

Kahoma Village will offer a mix of three- and four-bedroom single-family dwellings and two- and three-bedroom multifamily units. According to a recent draft environmental assessment, a total of 102 multifamily units will be affordable to households making between 80 and 160 percent of the island’s median income.

Developer Stanford Carr told the newspaper that he was confident the project would appeal to residents.

“Where else can you find — on Front Street — an opportunity to buy a brand-new home? As well as starter homes?” he asked.

Recent market studies show that Kahoma Village will experience a reduced level of competition since there is a limited supply of housing on the market in the West Maui region. The build-out period is expected to take two years.

Photo credits: www.malls-info.com

Luxury Condominium High-Rise Coming to Honolulu

by Adriana Pop, Associate Editor

HHMK Development, LLC, comprised of landowner and developer The Howard Hughes Corporation and a joint venture of Honolulu development firms, The MacNaughton Group and Kobayashi Group, are developing a luxury residential tower above the existing Nordstrom parking structure at Ala Moana Center in downtown Honolulu.

Called ONE Ala Moana, the 23-story high-rise will offer 206 one, two and three bedroom condominium homes ranging from 760 to 4,100 square feet. Prices will go from approximately $500,000 for the lower floor one-bedroom condominiums to over $9 million for penthouse suites. The average price per unit will be around $1.6 million.

“We are seeing extensive interest among potential purchasers and anticipate rapid sales because of the unique location, high quality design and finishes and the fact that buyers could be living in their new homes within the next 24 months,” said Bert Kobayashi, Sr., Kobayashi Group Founder and Senior Advisor. “The early interest is from individual buyers and the high-end realtor community, both in and outside Hawaii, who know our reputation and dedication to exceptional quality and stand-out developments,” Kobayashi added.

The project recently received $40 million in mezzanine debt with profit participation. A&B Properties, the real estate subsidiary of Alexander & Baldwin, Inc. is providing $20 million, while another $20 million is being provided by List Island Properties, LLC, a U.S. subsidiary of LIST Co., Ltd. of Japan. LIST will also serve as an exclusive representative of the new property for buyers in Japan.

HHMK Development has selected architectural firm Benjamin Woo Architects of Hawaii and Solomon Cordwell Buenz of San Francisco and Chicago to design the new building. Heyer & Associates LLC is the exclusive broker for the project, while Joyce Timpson & Associates is handling the marketing.

Photo credits: HHMK Development LLC

Developer Plans Large Mixed-Use Community in Downtown Kihei on Maui

By Adriana Pop, Associate Editor

The Krausz Cos. is planning a 320,000-square-foot sustainable, mixed-use project in the city of Kihei, one of Maui’s most populated communities.

According to the Pacific Business News, the proposed Downtown Kihei project calls for a village square; more than 200,000 square feet of office, medical office, retail and restaurant space; a 44,180-square-foot movie theater; a four-story, 150-room hotel; and more than 1,000 parking stalls.

The new development will be built between the Piilani Village Shopping Center and the Longs and Azeka’s centers, on four parcels of land totaling 27 acres. The San Francisco-based developer has purchased the property for approximately $10 million, the newspaper reports. The Krausz Cos. is now in the process of entitling the land. The company also owns the Safeway-anchored Piilani Village Shopping Center, which it acquired in 2003 for $27 million.

In other news, the Hawaii Community Development Authority has asked developers Lend Lease and Forest City Enterprises Inc. to post online elements of their proposals for the 690 Pohukaina project in Honolulu. According to the Honolulu Star-Advertiser, the developers will present their bids to the board on Nov. 20. A vote is expected in December.

The $500 million project will include the construction of two residential towers in Kakaako. One of the buildings will include 300 affordable for-sale units, while the second structure will offer 500 market-price units. Plans also call for a commercial and civic building, a parking structure, a business innovation incubation space and offices for the state’s library system and Friends of the Library.

Construction on the project could start in 2015 or 2016, with completion scheduled for the summer of 2019. The state agency estimates that 690 Pohukaina will create 500 construction jobs and as many as 1,000 indirect jobs.

Photo credits: The Krausz Cos.

TNP Strategic Retail Trust Sells Waianae Mall, Acquires Lahaina Gateway

By Adriana Pop, Associate Editor

TNP Strategic Retail Trust Inc. of Irvine, Calif., has entered into an agreement to sell the Waianae Mall Shopping Center in Leeward Oahu to an unnamed buyer. The company acquired the property in June 2010 for $25.7 million.

Built in 1981, the retail center comprises 11 buildings totaling 170,275 rentable square feet. It is anchored by Longs Drugs and City Mill Superhardware, and includes a mix of national and regional tenants, such as Burger King, Fantastic Sams, Goodyear Tire, the state of Hawaii, American Savings Bank, Waianae District Health and Aaron Rents.

“The property has performed well and has met our strategic goals. We have decided to sell the property to realize a significant return on investment, with the proceeds to be redeployed into new opportunities,” Thompson National Properties senior vice president of acquisitions Stephen Corea commented in a statement. “TNP continues to see attractive opportunities in the market in which to reinvest the proceeds from the sale.”

TNP Strategic Retail Trust also announced it is purchasing the leasehold interest in the Lahaina Gateway shopping center on Maui for an undisclosed amount. In September 2011, Central Pacific Bank acquired the 11-acre property out of foreclosure. The sale is expected to close this month.

Built in 2008, Lahaina Gateway has approximately 137,000 square feet of leasable area and a vacancy rate of about 20 percent. The shopping center is anchored by Foodland Farms Market, Barnes & Noble and Office Max.

“The acquisition of Lahaina Gateway by the company is consistent with our strategy of acquiring a mix of stabilized and value-added assets. The property serves a strong tourism-based demographic while also serving the needs of the community,” said Corea.

Marketwide, Hawaii’s retail sector ended the second quarter at a 5.9 percent vacancy rate, an increase from the first quarter’s 5.5 percent. According to a report released by CBRE Group, Maui and Kauai registered the highest vacancies, at 11.4 and 17.3 percent, respectively.

Photo credits: hawaii.gov

Chart courtesy of CBRE Group Inc.