Downtown luxury tower planned

By Andrew Gomes
Advertiser Staff Writer

A Dallas-based apartment developer has agreed to buy a nearly 1-acre parcel in downtown Honolulu from Pacific Century Financial Corp. to build an estimated $75 million luxury rental apartment tower.

Pacific Century, parent of Bank of Hawaii, put the site at 800 Nu'uanu Ave. up for sale in November. Bank officials said they would not comment until a sale is closed.

The purchase price is expected to be near the property's $8 million assessed value. Apartment use is allowed under current zoning.

JPI has hired Architects Hawai'i to design a proposed 28-story building. The company is interviewing several local contractors for the job. Wright said construction would take about two years. Units could be available as early as mid-2003.

Wright said the building, which would be managed by JPI, will contain a business center, fitness center, game room and large home theater for residents.

Prices likely will range from $1,900 to $2,900 a month for 1-bedroom, 1-bath or 2-bedroom, 2-bath units 700 square feet to 1,100 square feet in size.

The building will target mostly young professionals and, to a lesser extent, empty-nesters wanting to be on the outskirts of downtown overlooking Honolulu Harbor.

Wright said JPI believes the luxury residential rental market is one that needs to be filled. "Most of the rentals are condos that owners rent out, but there aren't a lot of high-rise rentals (owned and managed by one entity) throughout the city," he said.

"It's a good time to get into this market," Wright continued. "We're optimistic about it. We feel that in Honolulu we're hitting this at a good time in the cycle — that there will be growth. It's not going to be as dynamic as San Francisco, but we think it's going to be good, solid growth."

Residential high-rise development activity in Honolulu is hot, according to Christine Camp, president of the Hawai'i Developers' Council and the local real estate firm Avalon Development & Consulting.

"Multi-family (residential apartments) is definitely a trend that everybody is chasing now," she said. "It's considered to be a more stable type of project."

Making the multi-family market attractive, according to Camp, are falling interest rates that reduce financing expenses and help buyers of fee-simple projects, as well as consumer demand and little new competing products.

Avalon listed a 2-acre parcel adjacent to 'A'ala Park at Nimitz Highway, King Street and Iwilei Road in January for $10.5 million. Already three offers have been made by investors interested in developing residential projects on the site owned by Japanese firm Blue Chip Corp., Camp said.

A few miles diamondhead of downtown, Nauru Phosphate Royalties (Honolulu) Development Inc. this fall plans to build a luxury high-rise similar to its $110 million Hawaiki Tower on Pi'ikoi Street. Fee-simple unit prices will average $550,000 to $575,000.

Last week Victoria Ward Ltd., owner of 65 acres in nearby Kaka'ako, said it is interested in selling portions of land for the development of up to six residential high-rises.

JPI is active in primarily major metropolitan areas in a few dozen states across the country, but has not done business in Hawai'i previously. Last year the company started projects collectively valued at $900 million.

Bank of Hawaii has owned the 800 Nu'uanu site since 1972. In 1996, shortly after moving nearly 700 employees to a new 250,000-square-foot office facility in Kapolei, the bank said it planned to build an office high-rise on the site when the market improved.

Two years ago, the bank demolished a 100,000-square-foot building on the property and transformed it into a 90-space interim parking lot for employees. It decided to sell the property last year because banking charters prevent the company from developing commercial property in which it would not use significant space.