Ohana Waikiki goes condo
By Andrew Gomes
Advertiser Staff Writer
A California investment firm is moving ahead with a $20 million conversion of the Ohana Waikiki Hobron Hotel into fee-simple condominium units for seniors.
Oaktree Capital Management LLC recently began applying for permits to transform the hotel's 600 rooms into a "group living facility" with 184 condo units.
Oaktree, which bought the hotel at 343 Hobron Lane and surrounding property for $19.4 million in December from a subsidiary of Japan-based Odakyu Electric Railway Co., expects to have model units finished soon and to begin sales early next year, said Oaktree development partner Bill Deuchar, president of Honolulu-based U.S. Pacific Construction Inc.
The project is one of a growing number of large-scale noninstitutional retirement communities developed in Hawai'i over the past decade, offering seniors residential units with amenities tailored to their needs.
The Fountains, an Arizona-based senior housing operator with about 20 communities in 12 states, will manage Oaktree's condominium and is assisting with design.
Though prices are not set, fee-simple units will range roughly from $275,000 to $600,000 and will be marketed to buyers aged 65 and older. The condominium would provide dining services and other amenities such as housekeeping and "limited healthcare maintenance programs."
Oaktree also is planning to raze about 80 rundown low-rise apartments built in the 1940s and 1950s on parcels around the hotel in anticipation of building an assisted living facility and, depending on the future market, either more senior housing or condos.
Several residents say they have been told they will need to move out by the end of January, and have voiced opposition to the redevelopment plan. But the project has the support of the Waikiki Neighborhood Board and other members of the community who see Oaktree's plan contributing to the renewal of Waikiki.
"The property in question has dilapidated buildings and the Ohana Hobron Hotel's visitor units are no longer competitive," Rick Egged, president of the Waikiki Improvement Association, wrote in a letter to the city planning department. "The neighborhood in general has long been neglected. This proposal will upgrade and reposition a pivotal property in the area."
Deuchar said the parcels with the low-rise apartments will become a parklike setting in the interim, and that the buildings have to be removed. "It's going to be hard to sell (units in the high-rise) with pretty seedy conditions below," he said.
Oaktree expects the condo's location — near parks, medical facilities, restaurants and shopping — to attract both local residents and wealthy retirees from the Mainland. "It's for active retired folks who are interested in still being part of an active life," Deuchar said.
Jim Wright, president and principal broker of Century 21 All Islands Realty, figures the senior housing market here will continue to expand for the next 15 to 20 years, especially as aging baby boomers from the Mainland look to retire in Hawai'i.
"That market is going to bulge as we all start graying," said Wright, 52. "A lot of (seniors) are making final housing decisions."
Cullen Hayashida, president of Assisted Living Options Hawai'i, a nonprofit group that advocates development of assisted living facilities, said 160,000 people, or 14 percent of the local population, are 65 years or older, creating a large market for senior living developers. Hayashida said he knows of two developers that have looked at converting Waikiki hotels in the same fashion as Oaktree.
Oaktree is a $24 billion investment firm formed in 1995. The company owns several parcels in Waikiki near the Convention Center as well as the Turtle Bay Resort, which it is renovating for $35 million. Oaktree also invested in Liberty House, the former Hawai'i department store chain that was sold to Macy's parent Federated Department Stores last year.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
