2 more residential high-rises in works
• Kaka'ako condos on the rise (graphic)
By Andrew Gomes
Advertiser Staff Writer
O'ahu condominiums have been selling like hotcakes, leading two more developers to propose building residential towers in Honolulu, making five high-rise projects with nearly 1,700 combined units in the permitting phase.
In all, the projects likely will cost more than $600 million and represent considerable bets that the strong market, particularly high-rise living in the urban core of Honolulu, will hold up for the next several years.
The two new projects are within a couple of long blocks from each other along Kapi'olani Boulevard, and join two more nearing construction in Kaka'ako — ground zero for most of the activity.
The largest of the two newcomers is a 700-unit twin-tower condo proposed for the block bordered by Kapi'olani, Pi'ikoi, Pensacola and Kamaile streets, according to landowner Evershine, a partnership formed by high-tech entrepreneurs Fred and Annie Chan.
Evershine bought the 6.2-acre property in 1998 for $26 million with the idea that the site — a former Rainbow Chevrolet dealership slated for condo development by previous owner Asahi Jyuken — could become a research center.
Now residential market demand is driving the Evershine residential project, according to a developer's representative who said two 350-unit towers as high as 46 stories are planned in phases, with sales possibly starting early next year.
The other project, a 230-unit tower on the makai-diamondhead corner of Kapi'olani and Ward Avenue, had been stalled for years but is being pushed ahead under a new partnership between landowner POSCO, a South Korean steel company, and a South Korean development firm.
The Evershine and POSCO plans were recently submitted to the Hawaii Community Development Authority for consideration by the state agency overseeing Kaka'ako redevelopment.
If approved, the projects would join two others scheduled to begin construction later this year — Hokua, a 250-unit tower by local developers The MacNaughton Group and Kobayashi Group, and a 370-unit tower by Miami-based Crescent Heights.
Also in the development pipeline is a 100-unit condo tower in Waikiki for which Honolulu-based developer Alexander & Baldwin could break ground as early as next month.
A sixth project, though not in the permitting process yet, is an estimated 200-unit condo for a downtown site overlooking Honolulu Harbor.
The upwelling of so many projects comes amid record sales of existing condos and as builders of single-family and low-rise multifamily homes say they cannot keep up with demand.
But the sheer volume of all the condo units planned could present challenges for developers competing for buyers.
"There may not be enough for everybody, especially if they come on line around the same time," said Ricky Cassiday, a residential real-estate analyst.
However, to a large degree the various projects are targeting different groups of buyers from the middle market to the extreme high end, Cassiday said.
Hokua units, the only one of the five active projects to be sold, have averaged $1.1 million. Nearly 200 of the 250 units were snapped up over six days late last year as buyers signed contracts ranging from $535,000 to $5.5 million.
Crescent Heights bought two undeveloped parcels next to Hokua from Nauru Phosphate Royalties (Honolulu) Development Inc. in April and is building an on-site sales office scheduled to open in November.
Unit prices for Ko'olani, Crescent's 45-story tower, were not available yesterday from a developer's agent, but they are expected to be in the luxury category under Hokua's $1.1 million average.
"They're relating to Hokua without going head to head," Cassiday said. "The beauty of Hokua and Crescent is there's no competition."
For the Evershine project, the target market is not high-end buyers, according to a project consultant. Prices would be determined later to be flexible with future market conditions.
Prices for POSCO's Emerald Tower are expected to range from the high $300,000s for smaller units to an average of $450,000 for larger units in the 33-story tower.
A&B recently reported that there were 89 nonbinding sales of units at its Waikiki project Lanikea for an average price of $558,000.
Cassiday said the new projects should help ease pressure on existing condo sales, which have been breaking records recently amid rising prices and falling inventory.
In August, condo resales reached their third-highest volume ever recorded, with 646 transactions, compared with 769 in May 1990 and 654 in June 1988, according to the Honolulu Board of Realtors.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
