A&B sells Wailea land for $50M
By Andrew Gomes
Advertiser Staff Writer
Nine months after acquiring 270 acres at Wailea Resort for $67 million, Alexander & Baldwin Inc. has sold about 50 acres for $50 million — once again making the South Maui vacation destination one of the more lucrative real estate investments for the Honolulu firm.
The sales may not yet compare to A&B's $200 million sale of undeveloped land at Wailea in 1989 to Japan-based Shinwa Golf Group, but its buyback from Shinwa last October appears well on its way to paying off.
A&B has sold three large parcels to developers and 26 home lots as part of a strategy to reduce financial risk of its investment in Wailea, where it expects to develop much of the remaining 200 acres over the next several years.
The sales also show how optimistic developers have become about a housing market driven in part by Mainland buyers snapping up million-dollar vacation homes.
Demand is seen as especially strong at Wailea, which is one of Hawai'i's most desirable resorts but hasn't had much residential development during the 1990s, when Shinwa concentrated on making hotel and golf course additions to the resort that A&B started in the 1970s.
"The interest (by developers) has been extremely high," said Paul Hallin, senior vice president of A&B Properties. "We've somewhat regulated that because we want to develop a lot of it ourselves."
To give an example of market demand for homes: Shinwa's Wailea Resort Co. in the late 1990s was trying to sell Á-acre home lots called Wailea Golf Vistas starting at $300,000. Few sold.
During the first six months of this year, A&B sold 26 lots at the long-stalled project for an average of $860,000 each, or $22.4 million. The company has three more it acquired from Shinwa, and one is in escrow.
The lot sales, plus $28 million in sales of larger parcels to developers, is setting up a mini-boom of new vacation home construction that in eight to 10 years is expected to complete the resort, which has four major hotels linked by an ocean-front path, a shopping center and roughly 1,700 homes.
Hallin expects that A&B and other developers next year will start to produce the first of roughly 800 homes, and deliver an average of about 100 homes a year to fill in the last undeveloped parcels at Wailea that represent 18 percent of the 1,500-acre resort property.
Initial projects are planned by a Seattle partnership, a Maui developer, a Canadian firm and a joint venture between A&B and a local construction firm.
Hallin said all four are designed to offer a variety of home styles at different prices to cover a broad range in the upper end of the market.
Seattle firms Popkin Development and Weinstein A/U Architects + Urban Designers plan 24 single-family homes on 10 acres terraced to provide ocean views. Each home is designed to have three master-bedroom suites to suit fractional ownership. Site construction is expected to begin as early as December, and some homes have already been presold.
Martin Quill of Maui-based development firm CMI Group Hawaii heads another project, featuring 120 to 144 two-story townhomes on 30 acres. Because of hotel zoning, the townhomes could be used for vacation rentals.
Prices are expected to range from around $1.3 million to $3 million.
"If the market were to stay the way it is now, I would say we will have very strong interest," Quill said.
Quill, who is in the permitting process, hopes he can start selling units next spring, begin construction in mid-2005 and deliver the first units in 2006.
A unit of Canada-based GolfBC Group, which acquired the resort's three golf courses from Shinwa, bought a 9-acre parcel from A&B and has not disclosed its plans for the site zoned for multi-family residential use.
A&B is not revealing its plan for a 25-acre "anchor" site, though it has partnered to develop the parcel with Bob Armstrong of Armstrong Builders, a construction firm that worked with A&B to build high-end single-family homes at Ko Olina Resort & Marina on O'ahu.
A fourth residential site at Wailea is in escrow, and the buyer and sale price have not been disclosed.
That leaves A&B with 13 large parcels covering about 200 acres. Hallin said A&B would like to develop as much of that as possible, either alone or with joint-venture partners, though there may be more sales.
The 13 remaining parcels are mostly near the mauka edge of the resort adjacent to Piilani Highway, and require an additional water supply tank that A&B is designing and hopes to have constructed late next year to allow for more development.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
