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The Honolulu Advertiser
Posted on: Friday, March 29, 2002

BMW buys adjacent parcel to meet rising demands

By Andrew Gomes
Advertiser Staff Writer

BMW of Honolulu has purchased the property next to its nearly 2-year-old auto showroom on Kapi'olani Boulevard to expand in a neighborhood that is increasingly becoming dominated by luxury-car dealerships.

Aka DeMesa, right, shows Bob Engelking the 2002 Mini Cooper at BMW's showroom on Kapi'olani Boulevard.

Eugene Tanner • The Honolulu Advertiser

The company bought the 38,000-square-foot parcel containing three dilapidated warehouse-like buildings from Tokyo-based real estate investment firm Chuei Shokoh Inc. for $3.55 million. The sale was completed Wednesday.

BMW's purchase follows a move by nearby competitor Lexus, whose parent company, Servco Pacific Inc., announced plans last month to build a showroom for used Lexus and other luxury vehicles at the former Columbia Inn restaurant site two blocks 'ewa of BMW.

Dennis Short, BMW of Honolulu president, said the company needs more room to accommodate the British-made Mini automobile brand recently acquired by BMW, more service workspace and expected sales increases of new and used BMWs.

"You can't keep doing what you're doing without going backwards," he said. "You need to move forward ... and the logical choice was to go next door."

Short said the company is in the design phase of redeveloping the property, but will move fast to accommodate projected increases in business.

Used vehicle sales are forecast to account for most of the new business, according to Short, who said rising sales of new BMWs in the last few years means more used vehicles in the market.

The Mini brand was introduced to the already crowded showroom last week. Also, to provide maintenance service for a growing number of customers, Short said he needs to expand workshop stalls from 18 to 30.

Locating the used-vehicle showroom, Mini franchise and maintenance facility next door will free up room at the existing dealership for higher anticipated sales of new BMWs.

Short said the Honolulu dealership sold 360 new BMWs in 1999, and 900 last year. By comparison, the average U.S. BMW dealer sold 256 new cars in 2000.

Short projects his dealership will be selling 1,500 new BMWs a year by 2005, compared to a projected national average of 986.

Douglas Pothul, a senior vice president with Colliers Monroe Friedlander who represented Chuei Shokoh, said BMW of Honolulu wanted to buy the property at 825 Kapi'olani Blvd. in 1999, when it bought the site of its current dealership from the same seller for $6.74 million.

But environmental concerns derailed that sale, he said, adding that after Chuei Shokoh finished cleaning the property he naturally went back to BMW.

Chuei Shokoh bought the two parcels now owned by BMW for $31.5 million in 1993 from Kapiolani Condominium Associates, a consortium of Japanese companies that spent upward of $50 million to assemble several parcels and remove tenants as part of a plan to develop a residential high-rise.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.