Kapi'olani site up for sale
By Andrew Gomes
Advertiser Staff Writer
Another piece of property along the Kapi'olani corridor slated for a residential high-rise a decade ago has been put up for sale by its Japanese owner.
Chuei Shokoh Inc., a Tokyo-based real estate investment company, hopes to sell the nearly 1-acre property next door to BMW of Honolulu for $4 million, and recoup part of what had been a roughly $50 million investment by a consortium in 1990.
The offering at the 'ewa end of Kapi'olani is likely to draw interest from a variety of investors, developers or users in an area that has seen a resurgence of development plans recently, real estate analysts said.
Not far from the property, several landowners are pursuing projects, including: Inspiration Furniture, which recently broke ground on a $25 million interior design center; Lexus dealership operator Servco Pacific, which bought the former Columbia Inn property as a potential expansion site; Wholesale Motors, which is pursuing a mixed-use/residential development at the corner of Kapi'olani and Ward Avenue; and Posec Hawaii Inc., which is searching for a partner to build a senior-living or moderate-priced condominium on the opposite corner of the intersection.
Chuei Shokoh bought its property at 825 Kapi'olani Blvd., and an adjacent parcel, for $31.5 million in 1993 from Kapiolani Condominium Associates, a consortium of Japanese companies that spent upwards of $50 million to assemble several adjacent parcels and remove tenants as part of a plan to develop a residential high-rise on the site.
In an effort to recoup some of its investment, Chuei Shokoh sold the neighboring parcel at 777 Kapi'olani Blvd. to BMW in 1998 for $6.7 million. The company intended to sell the 825 Kapi'olani property at the same time, but environmental concerns delayed the offering, according to Douglas Pothul, senior vice president at Colliers Monroe Friedlander representing Chuei Shokoh.
"Over the last two years, the seller has painstakingly gone through costs and effort to clean up the property," he said.
The property is governed by special development rules of the Hawai'i Community Development Authority, the state agency that oversees redevelopment in Kaka'ako. Zoning allows a variety of commercial uses, including retail, restaurant, office and residential on the parcel.
Pothul said everything from another car dealership to retail or a restaurant would make sense for the site, and benefit from customer traffic generated by three luxury car dealerships in the area. "There's a heck of a lot of wealth traveling in and out of there," he said.
Three vacant warehouse-like buildings exist on the site, but because of their poor condition, the property is being sold as if it were land only at a price of about $105 a square foot.
Independent appraisers and brokers said the price is high in relation to past comparable sales at $95 a square foot, but that the location and surrounding projects should help attract a buyer.
"Kapi'olani is always a preferred location," said Ron Teves, president and chief executive officer of local real estate firm Chaney, Brooks & Co. "With the activity, it would suggest there is desirability there."
Teves said a lot depends on whether residential condominiums get built on nearby sites, which would boost the immediate population and create more need for neighborhood businesses. "It creates demand for ancillary type services," he said.
Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
