Jack Tyrrell specializes in Kakaako, Honolulu, Hawaii luxury condo projects.

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Luxury condo sales in Honolulu outpace houses in November

Photo: Jack Tyrrell and Company

Photo: Jack Tyrrell and Company

Sales of luxury condominiums outpaced sales of luxury single-family homes in November 2018. .“For condominiums, the $1.5 to $2 million price range had the strongest performance, up 50 percent, six compared to four last year,” Patti Nakagawa, Global Luxury director for Coldwell Banker Pacific Properties, said in a statement.

These numbers show that demand and interest for luxury condominiums continue to remain high. We continue to stay ahead of and on-trend in this market, and would love to talk real estate with you about what to look forward to in 2019!

Read more from Pacific Business News, below:

Sales of luxury homes on Oahu were relatively flat overall in November, compared to last year, but sales of high-end condominiums outpaced sales of single-family homes for $1.5 million or more, according to a report by Coldwell Banker Pacific Properties.

Overall, there were 39 residential properties sold for $1.5 million or more, compared to 38 sold in November 2017, an increase of 3 percent. The median price of those single-family homes and condos was $1.98 million, an increase of 9 percent from $1.8 million last year.

Of those, 11 sales were for luxury condos, with the highest sale being for $11.07 million on Nov. 29 for a three-bedroom, 3.5-bath unit at Park Lane Ala Moana. That’s compared to nine luxury condos sold during the same month last year, an increase of 22 percent.

There were 28 single-family homes sold for $1.5 million or more in November, compared to 29 sold in November 2017, a decline of 3 percent. The highest prices last month were $9.88 million for a seven-bedroom, five-bath house in Lanikai that sold before it was listed and $7.2 million for a five-bedroom, 5.5-bath home on Kahala Avenue.

“Single-family home sales in the lower price range of $1.5 to $2 million were down by 24 percent, 16 compared to 21 last November, mainly attributable to a lack of desirable inventory in that price range,” Patti Nakagawa, Global Luxury director for Coldwell Banker Pacific Properties, said in a statement. “For condominiums, the $1.5 to $2 million price range had the strongest performance, up 50 percent, six compared to four last year.”

The report noted that escrow activity for luxury properties at the end of November was 10 percent lower than the same time a year ago.

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Neighborhood News: Kewalo Harbor to undergo major transformation starting this month

Photo: Kewalo Harbor, Howard Hughes Corporation

The Howard Hughes Corporation has begun its long-planned renovations to Kewalo Harbor and Kewalo Basin. The plans will bring additional security and long overdue renovation to the harbor infrastructure improvements, including water, fire and electrical upgrades, security cameras and gates, Wi-Fi, new docks and a marine fueling facility. Additional improvements include an improved City lifeguard response station, landscaping, signage, restroom facilities and marketing resources for businesses on the harbor. The project will be led by Honolulu-based Sea Engineering Inc.  

"This partnership will allow us to bring much-needed repairs and upgrades to the Kewalo facilities while also creating a stronger connection between Kewalo Harbor, Ala Moana Beach Park and the nearby areas," said Howard Hughes Corp. Vice President for Community Development, Todd Apo.

Watch the full news report on KITV News, here:

Kewalo Harbor will undergo a major transformation starting this month.

The Howard Hughes Corporation is set to break ground on a $20 million renovation project.

Dock renovations and facility upgrades include improvements to security and a city lifeguard response station.

Upgrades will take place in phases and are set to begin in mid-September.

"I think this community of Kewalo Harbor and Kewalo Basin is going to get so much better with what Kupu is doing here from a non-profit standpoint, friends of Kewalo taking care of Kewalo park and the City and County with their efforts at Ala Moana Beach Park. All of this will come together to create an amazing oceanfront for all of us," Todd Apo, vice president of community development with the Howard Hughes Corperation said.

"They all need renovation, definitely and this isn't the only harbor that needs renovations, so I'm happy about that part," Ari Safari, a Rosalie Claire boat owner said. 

Safari said she'd welcome more boat services in exchange for higher fees.

A lease agreement between HCDA and Howard Hughes plans for increased slip rates.

After the project is complete, rates could go up between $2 and $4 per foot.

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Industry News: ​Kakaako condominium prices soar 88 percent in July

Photo: Jack Tyrrell and Company, Inc. One-bedroom luxury rental in Waiea, featured on wardvillagerentalshwaii.com

Photo: Jack Tyrrell and Company, Inc. One-bedroom luxury rental in Waiea, featured on wardvillagerentalshwaii.com

This article originally appeared in Pacific Business News:

Kakaako median condominium prices soared 88 percent to $695,000 last month, with closed sales increasing 15 percent to 47, according to a local market update released by the Honolulu Board of Realtors.

Homes also moved quicker, selling after an average of 12 days on the market, a 37 percent decrease from last July.

Kakaako median condominium prices soared 88 percent to $695,000 last month, with closed sales increasing 15 percent to 47.

Waikiki had a 21 percent drop in condo sales last month, decreasing to 78 from 99 last year. The median price paid for those condos was $367,500, a 6 percent drop from $390,000 last July.

For single-family homes, Hawaii Kai and Kaneohe saw double-digit increases in the median price last month, increasing 18 percent to $1.2 million for Hawaii Kai and 13 percent to $964,350 for Kaneohe.

Closed sales, meanwhile, decreased 6 percent and 12 percent, respectively.

Year-to-date median prices for the neighborhoods are up 8 percent to $1.1 million and $857,250, respectively.

Kahala experienced a 12 percent drop in median price for single-family homes in July, decreasing to $1.5 million from $1.7 million in July 2016. Year-to-date prices are down 4 percent to $1.7 million.

In the Ewa Plain, closed sales increased 28 percent to 73 in July, with the median price inching up 2 percent from last July to $660,000. New listings in the area increased 23 percent to 95.

This area remains popular due to its lower price points and varied options, according to Sue Ann Lee, president of the Honolulu Board of Realtors.

“For homebuyers willing to look outside Urban Honolulu, Leeward and Central Oahu neighborhoods like Wahiawa and Makakilo offer a wide selection of options that fall at or even below the island-wide median sales price of $750,000 for single-family houses and $425,000 for condos and townhouses,” Lee said.

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Real Estate News: Oahu condo prices climb

Photo: Jack Tyrrell & Company, Inc.

Photo: Jack Tyrrell & Company, Inc.

The Honolulu Star-Advertiser's Monday, August 7, 2017, front-page story reported on the continuous climb in condo prices seen on Oahu. The report looks at data from the Honolulu Board of REALTORS, which shows record high median sales price of $425,000 for Oahu condos in July 2017. The median price in Ala Moana-Kakaako for July spiked 88 percent from $370,000 in July 2016 to $695,000 in July 2017. Prices will only continue to climb, as demand outweighs supply, making it more important than ever to find the right Realtor to help you find the best location and unit, and to guide you through the negotiation process to ensure the unit doesn't slip away.  

Read the Star-Advertiser's report, below:

Oahu’s more affordable option for homeownership is climbing in cost as median sales prices for condominiums hit historic highs, as evidenced in July.

Previously owned Oahu condos sold for a median $425,000, increasing 6.3 percent from $400,000 in July 2016, according to resale figures released Sunday by the Honolulu Board of Realtors. The July median sales price for Oahu condos exceeded the previous record high of $415,500, set in April.

“Median sales prices for condominiums are the highest we’ve seen as prices have continued to soar,” Sue Ann Lee, president of the local Realtors trade association and a broker with Properties of the Pacific, said in a statement. “Condos and townhouses at midrange price points are a likely alternative when there is a lack of affordable single-family home inventory, causing the median sales price to shift up.” 

The median sales price for Oahu condos, which also include town homes, has been at $400,000 or above for five straight months. The median price is a point at which half the homes sold for a higher price and half for a lower price.

In July the sales of 475 Oahu condos closed, a 7 percent increase from 444 in the same month last year. As the number of sales rose, median days on the market declined. Sales of condos closed after 14 days on the market, a 22.2 percent decrease from 18 days on the market in July 2016.

Year-to-date, condos make up 60 percent of home sales, with 3,272 sales closed on condos, compared with 2,124 single-family homes.

The area with the most condo sales in July was Waikiki, with 77 sales, followed by Ewa, with 55. There were 45 condos sold in Ala Moana-Kakaako, according to a Wednesday report released by Locations, a major Hawaii residential real estate brokerage firm.

The median price of those sales in Waikiki was $370,000; in Ewa, $387,000; and in Ala Moana-Kakaako, $695,000, according to Locations. The median price in Ala Moana-Kakaako for July spiked 88 percent from $370,000 in July 2016.

As Oahu’s median sales prices for condos broke records, median sales prices of single-family homes saw a modest change. Single-family home prices rose slightly over the same month last year but came in below recent highs.

Single-family houses on Oahu sold for a median $750,000 in July. The July median price inched up 0.5 percent from July 2016’s $746,000.

“It’s like an escalator. It’s going up and up and up at a really constant rate. It has been doing that for about five years here on Oahu,” said Paul Brewbaker, principal of TZ Economics. “These numbers don’t seem to be that much out of bounds with what we’ve seen for a long time, at least since the summer of 2011.”

Despite increasing over the year-ago price, July’s median sales price of $750,000 pales next to the record $795,000 hit the month before. June’s record median sales price was $35,000 higher than the previous record of $760,000 exactly a year earlier. Brewbaker said the difference fits with current seasonality patterns, noting June prices are higher than July and May prices.

The number of single-family homes sold was up 4 percent, with 335 homes sold in July and 322 a year prior.

In July the area with the most single-family home sales was Ewa, with 70, followed by Mililani with 25. Tied for third was Pearl City-Aiea and Leeward with 22, according to Locations.

The median price of those sales in Ewa was $681,875. The median price in Mililani was $731,500. In Pearl City-Aiea it was $745,000, and in Leeward it was $517,500.

While the number of single-family home sales saw a slight increase in July, the number of days a home was on the market during that time surged. The number of days a home was on the market spiked 25 percent in July, with sales closing in an average of 20 days, compared with 16 days in July 2016.

In July, 481 new listings of single-family homes were added to the market. Only once in the last 24 months has the number of new listings been higher: in March, when there were 492 new listings. In comparison, the condo market last month saw 674 new listings.

According to Locations’ Wednesday report, the firm said it expects Oahu condo and single-family home prices to continue a steady climb as demand continues to outpace available supply.

“An uptick in new listings for both single-family homes and condos is welcome news for prospective homeowners; however, demand continues to outpace available inventory,” Scott Higashi, CEO of Locations, said in the report.

HOME SALES
The number of homes sold on Oahu in July with the median price and percentage change from the same month last year:

  • SINGLE-FAMILY HOMES

    • SALES MEDIAN PRICE

    • July 2017 335 $750,000

    • July 2016 322 $746,000

    • Change 4% 0.5%

  • CONDOS

    • SALES MEDIAN PRICE

    • July 2017 475 $425,000

    • July 2016 444 $400,000

    • Change 7% 6.3%

Source: Honolulu Board of Realtors

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Wall Street Journal: Honolulu’s Kakaako District Is at the Center of a Building Boom

The Wall Street Journal did an excellent feature on Honolulu's Kakaako district here.  The article highlighted Waiea as the premiere example of luxury condo development underway in Honolulu.  The story not only shared the story of Waiea, but also touched on the greater Ward Village community, The Howard Hughes Corporations's dedication to respecting Hawaiian culture, and its contribution to building affordable housing.

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Howard Hughes tops out second condo tower Anaha in Ward Village

Photo: Jack Tyrrell & Company, Inc.

Photo: Jack Tyrrell & Company, Inc.

Anaha is officially topped out!  The Howard Hughes Corporation announced today, Monday, August 29, 2016, that its second luxury condominium project has topped out.

Our client, Dr. Thomas Yue, briefly discusses his two Anaha purchases in this recent article featured in The Wall Street Journal.  The project is slated to be completed by summer 2017.

Read more in the Pacific Business News, below:

The Howard Hughes Corp. (NYSE: HHC) announced Monday that it had topped out Anaha, the second condominium tower to be completed within its 60-acre Ward Village master-planned community in Honolulu. Anaha is scheduled to open in summer 2017.

Ward Village has contracted to sell more than 1,100 homes to date, and more than 90 percent of the condos in Anaha are sold, the company said in a statement. The building is a collaboration by architect and design firm Solomon Cordwell Buenz, Honolulu-based Benjamin Woo Architects and global design leader Woods Bagot Interiors.

Anaha will offer 244 studios and one-, two- and three-bedroom tower residences as well as 73 low-rise flats and townhomes. Chef Peter Merriman will open the first Oahu location of his Merriman’s restaurant in summer 2017.

“The topping out of Anaha is another significant milestone as we continue to create a neighborhood at Ward Village that enriches the lives of all those who experience it,” said David R. Weinreb, CEO of Howard Hughes.

Three residential buildings are currently under construction and five are available for sale at Ward Village. Contracted sales at the community have reached approximately 90 percent for the 493 homes in its first two luxury condominium towers, Waiea and Anaha. Construction began on Ward Village’s third tower, Aeo, in February.

Waiea, which will open late this year, will include 175 residences and house a Nobu Honolulu restaurant. Work on Aeo will be completed in 2018; it will include 466 residences and a Whole Foods Market Inc. (Nasdaq: WFM) store.

When completed, Ward Village will have more than 4,000 new residences.

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"Hardcore Home Collectors" Client feature in The Wall Street Journal

Jack Tyrrell and Company, Inc. client and friend, Dr. Thomas Yue in his home on Oahu's North Shore.

Congratulations to our good friend and client Dr. Thomas Yue for his feature in The Wall Street Journal's article, "Hardcore Home Collectors." Featured in the story are Dr. Yue's homes on Oahu's beautiful North Shore, the Waimea Point Residence and the Waimea Three Tables Residence. Dr. Yue also talks about his two most recent purchases in the highly anticipated Ward Village Anaha towers.

Read the full article, with Dr. Yue's section in bold, below or online here:

"Hardcore Home Collectors"

By Katy McLaughlin, Aug. 18, 2016 9:30 a.m. ET

Self-diagnosed house addicts like Ben Stein are a rare category of buyers who acquire homes out of a love of real estate rather than a practical need

Some people collect wine or paintings. Others like stamps or model trains. Then there’s Ben Stein, a writer, actor and economist, and his wife, Alexandra Denman: They collect homes.

The couple owns 13. They’ve got a house in Beverly Hills and one in Malibu, plus two West Hollywood condominiums. Then there are two Washington, D.C., apartments, a house in Rancho Mirage, Calif., and a condo to boot. And there are others.

Though an economist by trade, Mr. Stein said his investments—none of which are rented out—don’t represent a cagey financial plan. Instead, it’s a syndrome: “I would say I’m a house addict,” Mr. Stein joked.

Self-diagnosed house addicts are a rare category of property buyers who acquire homes not necessarily to rent them out, flip them or because they need a place to stay. They do it for the thrill of the purchase and the fantasy a new home can inspire. In some cases, multiple home buyers come out on top financially. In other cases, their proclivity for property has dismal financial consequences.

Many well-off Americans own more than one home: The 2013 Survey of Consumer Finances from the Federal Reserve showed that just under 40% of respondents in the top 10 percentile of income owned at least one second home. World-wide, people with at least $30 million in assets have an average of 2.9 properties, according to a report published last year by global research firm Wealth-X and Sotheby’s International Realty. The world’s 2,479 billionaires have an average of four homes apiece.

True house collectors easily blow past the averages.

Robby Browne, a real-estate agent with Corcoran Group in Manhattan, owns four apartments in a building on Central Park West, and one unit in another park-side building one block away. He is currently shedding a West Village apartment, which is on the market for $5.35 million, only to buy another one, which is in contract for $6.5 million. He also spent roughly $1.5 million building a house in Bridgehampton, N.Y., near the beach.

Some of Mr. Browne’s acquisitions have been very lucrative, while others demonstrate that passion, not profit, is the guiding force. Comparable units to one he owns on Central Park West currently sell for about three times what he paid for it, and he makes $18,000 a month renting it out, he said.

His four apartments in one building seem less logical: He lives in one, uses another for guests, and has two small units—under 100 square feet each—that he uses for storage, he said.

The West Village apartments represent his long-held ambition to move downtown—“but in the end I can never bring myself to,” said Mr. Browne. After realizing he couldn’t face the move, he leased the unit he is selling. He still hasn’t decided if he’ll move into or rent out the new one.

Mr. Browne said he has almost always made money on the 22 properties he has bought and sold over the past 30 years, though not as much as he would have if he’d invested in gentrifying parts of Brooklyn or Queens.

Though buying in prestigious neighborhoods can be a sound financial investment, house collectors say they are not primarily driven by the bottom line.

Part of Mr. Stein’s motivation: “I don’t like noisy neighbors,” he said. His sensitivity to noise prompted him to buy not one but four condos in a resort-style building on Lake Pend Oreille in Sandpoint, Idaho, where he and Ms. Denman spend summers. Starting in the mid-2000s, they purchased their own three-bedroom unit, plus the one next door and two downstairs, so that no neighbors can cause “any vibrations,” he said.

It was a neighbor’s loudly ringing telephone that prompted Mr. Stein to purchase the apartment next door to his in a West Hollywood building. Why didn’t he just sell his unit next to the noisy one? He loves the “fantastic view” from the building and enjoys the peace and quiet in the apartment, he said. Plus, that condo could sell for roughly $700,000, said Anna Sadowska, an agent at Teles Properties—over a half-million more than he paid for it in 1997.

Mr. Stein declined to discuss how he has fared financially from his real estate, but said, “if I’d put the money in the stock market, I would have done way better.”

Beyond noise issues, he theorized that his love of homes stems from his mother’s interest in property at time when Jewish families like his were barred from purchasing in many neighborhoods of Washington, D.C., where he grew up.

“It very much means something to me that I can live wherever I want now,” said Mr. Stein.

Thomas Yue, an anesthesiologist and president of Regional Anesthesia Services, a provider of doctors and nurses in Minnesota, owns three houses on the Hawaiian island of Oahu and is in contract to buy two condos in Ward Village, a new development under construction between downtown Honolulu and Waikiki, for a total of $3.7 million. He also has a house in St. Paul, a ski condo in Vail, Colo., an apartment in San Francisco and another in Millbrae, Calif. He doesn’t rent out any of his properties, he said.

Though two of his homes on Oahu’s North Shore represent an investment of about $11 million, Dr. Yue spends most of his time in a more modest house about 30 miles south, to tend to his 20 tropical fruit trees, he said. The North Shore homes, designed with multiple terraces and large windows, were renovation and building projects that he enjoyed creating, “like you would with a work of art.”

Timothy Corrigan, 58, is a Paris- and Los Angeles-based interior designer who suffers from an exotic strain of real-estate addiction: He buys French châteaux, serially.

In the late 1980s, he renovated his first château in Normandy and sold it for under $1 million. In 1992, he renovated another about 60 miles southwest of Paris and sold it for roughly $1.6 million. In 2003, he bought and sold a Loire Valley château within a year when a different one became available. Today, that château—a 40,000-square-foot palace on 74 acres about an hour by train from Paris—is on the market for $11.4 million.

His total take from his château sideline: zero, he said. He has lost money on every one—and will lose money again, even if the current property sells for the list price.

“The restoration of châteaux is not a moneymaking business, but I just love the process,” said Mr. Corrigan.

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Sneak peek at Symphony Honolulu’s retail and restaurant space Velocity

Screenshot of the entrance to Velocity at the Symphony Honolulu, Pacific Business News

With Symphony Honolulu Unit 4202 now ready for move-in, and we are excited about what is coming to its ground floor!  Pacific Business News has a great article updating us on what is to come to Velocity, the ground floor retail and restaurant space within the Symphony.  In addition to automotive dealership featuring European car models, there will be a restaurant featuring Italian wine, pizza and paninis; a women's dayspa, men's clothing store, and more!  Read below for full details:

The bottom floor of Symphony Honolulu, a new condominium tower at 888 Kapiolani Blvd., will host a car dealership by Hawaii-based JN Group Inc., two Italian restaurants by PJ Partners Inc. of Japan, a wine and food store, and two combination retail store/salons.

“Velocity is the retail piece of Symphony Honolulu. It’s a culmination of eight European automotive brands and eight European motorcycle brands,” Brad Nicolai of JN Group, the parent company of JN Automotive Group, told Pacific Business News in an interview. Cars sold in Velocity include Audi, JaguarLand Rover and other European exotics. Click on a photo to see a slideshow.

Velocity’s men’s clothing store, called Sixty-One, will include a men’s barber shop. The store is named after the year that Nicolai’s father, Joe Nicolai, founded JN Group in Honolulu in 1961. The men’s clothing store and salon will be the developer’s own retail concept. The group also operates Harley-Davidson clothing outlets on Oahu.

A woman’s boutique will include women’s spa services such as a dry bar and lash bar. Kristin Wood, founder of Honolulu salon Kristin Wood Lashes, will operate the salon.

Velocity will also host a wine and gourmet food store owned by a separate operator.

Nicolai said he envisions Velocity as a reflection of the piazza public markets found in towns and cities across Italy.

“Fortunately, through my travels through Asia, Europe and New York City, I’ve been able to get different conceptual ideas of how retail can work with residential, mixed-use projects,” he explained. “The unique experience we’re trying to connect is tied to my father’s Italian heritage, the experience of the old country.”

The developers also have plans to make the space a venue for performances.

“We took the piazza concept as a place of congregation,” Nicolai explained. “Kakaako has really lent itself to be a host to artisans whether it be fixed art or live art.” As the space is across the street from the Hawaii Symphony Orchestra, “it lends itself with music and arts.”

Velocity’s two leveled architecture will include a restaurant upstairs and downstairs. Restaurant operator PJ Partners, who also operate Honolulu’s Tonkatsu Ginza Bairin, have not released the restaurant names. Both will be under the direction of Italian Michelin Chef Gianpaolo Raschi.

The bottom floor of Velocity will host a “typical Italian wine and bar,” as Chef Maurizio Roberti described. Roberti is an Italian cuisine master chef currently based in Japan and is working to develop the restaurants. The bottom floor will also have an espresso bar.

In addition to drinks, the menu will include pizza and paninis. “People will call it fast food; we call it soul food. It’s fast on the go, but it’s still soul food,” Roberti said.

The downstairs restaurant will seat 40 to 50 customers, plus outdoor seating.

The ground floor will have a high ceiling and a mezzanine to showcase the automotive outlet’s Ducati motorcycles and Vespa scooters.

“You get the feeling that you don’t need to get on a plane and go to Italy, you can just come down to Velocity. That’s the kind of thing we’re trying to create” Roberti explained.

Ingredients for the restaurant’s menu will include a combination of locally sourced food and Italian imported cheeses and meats. The still-unnamed restaurant is reaching out to locally sourced food producers to partner with and specifically seeks a Hawaii-based gelato company. The restaurant is also looking into making its own Italian sausages to add to the menu.

Velocity’s upstairs area will have a cocktail bar and a formal dining restaurant. A large glass window will separate the kitchen from the dining area, so “you can actually see all the chefs at work,” Roberti said.

The upstairs restaurant’s menu will include predominantly seafood — Gianpaolo Raschi’s specialty.

Roberti described the menu as “simplified Italian, not the over-indulgent, swimming in oil, backstroke in tomato sauce or anything like that. It’s real Italian.”

Upstairs restaurant will include a VIP shift-table area that seats 10. Restaurant developers did not provide price points for menu items upon request. Combined, both restaurants will cover 6,000 square feet including the outdoor seating area.

The restaurant projects are looking to hire locally, and they have plans to create apprenticeships and a collaboration with Kapiolani Community College. “We would like to get the community involved in our project,” Roberti said.

Symphony Honolulu is a 388-unit condominium tower and has been open to unit owners since June. According to Nicolai, the tower’s units are about 96 percent sold out. JN Group developed the tower in collaboration with OliverMcMillan LLC.

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Pacific Business News: How much for a slice of [luxury] paradise?

Waiea, photo courtesy of Ward Village, Howard Hughes Corporation

Waiea, photo courtesy of Ward Village, Howard Hughes Corporation

From Pacific Business News' Duane Shimogawa, originally published on April 22, 2016:

Hawaii’s luxury condo market may seem eye-poppingly expensive, but is a bargain compared to other destination cities.

A private elevator straight to the world’s largest open-air luxury shopping center. A movie theater with tiered seating and a gated dog park. Luxury villas with private garages and private gardens as well as resident dining rooms with catering and chef’s kitchen. These are just some of the world-class amenities that come with the steadily rising asking prices of units in Honolulu’s newest luxury towers. Examples range from The Howard Hughes Corp.’s Waiea condominium’s $36 million grand penthouse, the highest asking price for a unit of its kind in Hawaii, and the Park Lane Ala Moana penthouses, developed by a partnership including Kobayashi Group and The MacNaughton Group, that are priced in the upper $20 million range.

Most sources tell PBN that this level of luxury condo product, while relatively new to Honolulu, will only continue to get better and expand throughout Hawaii.

The recent wave of luxury high-rise towers also includes The Howard Hughes Corp.’s Anaha and Waiea projects, Kobayashi Group and The MacNaughton Group’s ONE Ala Moana and Park Lane Ala Moana projects and Irongate’s Ritz-Carlton Residences, Waikiki Beach project. OliverMcMillan’s Symphony Honolulu project also includes units in the luxury category.

Honolulu currently commands an average between $3,000 and $4,000 per square foot for its luxury condo units, with more room to ascend, according to BJ Kobayashi of the Kobayashi Group.

However, for all the concerns of late that these products are ridiculously out of reach for the average local homeowner, that fact is the prices of Honolulu’s new luxury condos pale in comparison to some of the other new luxury towers across the globe. London’s One Hyde Park has units commanding $12,000 per square foot, as does Opus Hong Kong, three or four times the asking prices of Honolulu’s priciest units.

Another way in which Honolulu’s luxury apartments are competing on this global stage is through the use of world-class architects.

While Opus Hong Kong comes from the twisty mind of Frank Gehry, here in Hawaii such architects as Canada’s James K.M. Cheng Architects, Chicago-based Solomon Cordwell Buenz, Pennsylvania-based Bohlin Cywinski Jackson and New York’s Richard Meier & Partners Architects either have designed or are designing towers in The Howard Hughes Corp.’s 60-acre Ward Village.

How does Honolulu’s fledging luxury market stack up? PBN checked in with well-established luxury condo markets, including London, New York, Hong Kong and Miami, to get a sense of just where Honolulu stands.

Sources say that while Honolulu might never be in the same conversation as these world-class cities, there are certain attributes that make Hawaii an attractive buy for luxury condo shoppers, including its year-round nice weather, close proximity to Asia, safety and security and unique culture.

“We are equal to those markets in the overall experience,” Todd Apo, vice president of community development for The Howard Hughes Corp., told PBN. “From what we offer from a luxury experience, we have the ability to play within that ballpark. The guys who are looking to buy in Ward Village and the rest of Honolulu, they are looking to be in Hawaii and part of Honolulu. You look at New York and London, not because of only the condo, but everything else that’s around it. It’s like Ward Village. Yes, we are building that condo village, but it’s that community you have around you. The only reason we may be deemed behind the curve is that we haven’t done it yet. Now, we are seeing it happen.”

Why now?
The towers rising in Honolulu’s skyline all come down to a strong market that continues to strengthen.
“You’ve got Symphony, Waiea, Anaha, Park Lane and ONE Ala Moana,” Kobayashi, partner and co-founder of the Kobayashi Group, told PBN. “That stuff would not be done unless there is a pretty vibrant market.”

He noted that in the next five to 10 years, prices of these ritzy units may ascend even more, mainly because the units may be in high demand as inventory remains tight.

“At the beginning of my career 20 years ago, no one thought things would go for $1,000 per square foot and then they did and so on,” Kobayashi said. “Now, we are at the very upper end and a select few units are hitting higher numbers. The values over time will ascend. Great properties will continue to ascend in value. Hawaii always seems to push the envelope.”

What sets Honolulu apart from the rest
Howard Hughes’ Apo pointed out that almost everyone is recognizing that these are probably the highest-priced and most prestigious condos being built in Hawaii to date.

“Obviously, sales will play out the reality,” he said. “It’s Hawaii. It’s within the United States from overall safety standpoint. There’s a large audience for a Hawaii product. It starts with bringing in [big-name architects] and having the expected quality that we put into our units.”
Hawaii has to commit to not only sprucing up its condo units, but further creating and growing that experience that buyers are looking for in the surrounding neighborhoods.

“What makes us unique is the tie back to the culture and the Hawaiian community,” Apo said. “You take a Waiea and take that name meaning, ‘water of life,’ [and] seeing those meanings and history of the land that gets tied to the development and place you call home. That’s something special and unique that attracts people.”

At the end of the day, it’s still Hawaii that makes Hawaii special, according to Lance Wilhelm, managing principal for California-based Irongate, which is the developer of the Ritz-Carlton Residences, Waikiki Beach project.

“We sell it and I’m sure the other condo developers say that as well,” he told PBN. “That Hawaii is at the center of what we do. It’s not just about having the same kind of amenities you would find in New York condos. What do we have that you cannot get in New York? The main ingredient is Hawaii, its people, its culture, all the things that make us special. Thankfully, that’s still true.”
Others say that there are a lot of wealthy individuals who are tired of looking at buildings in dense urban landscapes, and that Honolulu is the only place where they can enjoy a city lifestyle that’s near the ocean.

“As Ward Village takes shape, as more and more wealthy people see this, we probably won’t reach levels of New York and London, but more and more people will want to get away from the cities and that’s where Honolulu comes in,” Kristian Nielsen, founder of real estate firm Honolulu HI 5, told PBN.

Who’s buying?
When a buyer comes to Hawaii looking to purchase real estate, many of these buyers already own a piece of paradise.
“They are looking for a second home in Hawaii,” Kobayashi said. “Hawaii is so much different than Hong Kong, Tokyo or Vancouver. I don’t think they would sit back and compare Hawaii to the other markets.”

Park Lane has seen a mix of buyers, mostly from Hawaii, Japan, Hong Kong, Singapore and the West Coast.

A similar buyer profile may be attributed to other condos developed by Kobayashi Group and The MacNaughton Group — ONE Ala Moana and Hokua.

For Howard Hughes’ Waiea and Anaha condos, the buyers include a mix of international, domestic and local buyers, according to Apo, who does not see Honolulu in competition with buyers in New York, London or Miami.

At the Ritz-Carlton Waikiki condominium-hotel towers, there are lots of international buyers, mainly from Asia, said Wilhelm.

“Our particular model is condo-hotel, which is different from Park Lane or other luxury condos,” he said. “I think our product, our developments are very competitive with what’s available in the international market.”

Some, including Myra Brandt, principal broker for LIST Sotheby’s International Realty, contend that Honolulu is fighting for the same buyers as in other markets such as New York, London, Miami and Hong Kong.

“That buyer is global, a worldly traveler,” she told PBN.

“We have had someone look at property here and he was going back and forth between that and in New York. It came down to preference of lifestyle. He wanted lots of nightlife, businesses and city life. He does eventually want to retire in Hawaii, but wasn’t ready for that.”

Brandt, a veteran of the luxury residential market, says that the first wave of buyers are people who are looking for a return on their investments, and that it is difficult to find a return on their investment in Hawaii.

“The second wave is looking for the lifestyle,” she said. “We will always be a choice for lifestyle.”

The future of this market
Honolulu does have a lot of room to grow its newly minted luxury condo market, according to Douglas Shanefield, vice president and Previews property specialist for Coldwell Banker Pacific Properties Ltd.

“For what you get for your money, our product is being looked at favorably,” he told PBN. “It may seem like there are a lot of cranes in Honolulu, but really, we don’t have overbuilding going on. We still have a limited inventory.”

Despite Kobayashi Group and The MacNaughton Group recently pulling the plug on their Vida 888 at Ala Moana luxury high-rise condo project due to poor sales, some experts say that there is still demand for this type of product.

“It’s slower and not selling at the same pace, but there’s no real indication that things are turning the wrong way,” Nielsen said.

Apo also thinks that the luxury market is softening, but it hasn’t stopped.

“The nice thing for us is that we have a variety of product,” he said.

Hawaii is finally starting to create the product that compares to the other buildings on the market, according to Shanefield.

“We have some very new and exciting buildings coming up in Hawaii that are really not like anything we have been building before,” he said. “I don’t think we are trying to be anything we’re not. We’re not trying to be New York or London. Those are places where people have a unit to be near their business. Here, people have a condo as a getaway or retirement or to be close to Asia. We are just starting to have some of the quality of the products those buyers are used to.”

OTHER LUXE CITIES

$151 million
London: One Hyde Park
Per square foot:$16,777

$82 million
New York: Bloomberg Tower/ One Beacon Court
Per square foot:$12,700

$66 million
Hong Kong: Opus Hong Kong
Per square foot:$12,000

$60 million
Miami: Faena House
Per square foot:$4,794

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