Could more luxury high-rise towers rise at Hawaii’s Ala Moana Center?

Park Lane Ala Moana 1488 Ala Moana BlvdHawaii’s largest shopping mall, Ala Moana Center in Honolulu, is already home to luxury condominiums ONE Ala Moana and the Park Lane Ala Moana project under construction and may become home to another condo or two in the future, multiple sources tell Pacific Business News.

“There have been many rumors floating around regarding more residential condominiums attached to Ala Moana [Center],” Trevor Benn, president and principal broker of Honolulu-based Benn Pacific Group Inc., told PBN in an email Wednesday.

He noted that the 23-story Ala Moana Building, which houses mostly medical and dental providers, has been discussed as a potential condo development site, as well as the Macy’s location.

Additionally, the nearby 18-story Ala Moana Pacific Center, which has a mix of corporate tenants and service providers, will likely remain an office building since mall owner General Growth Properties Inc. (NYSE: GGP) does not own the entire land area in fee right now, Benn said.

Tenants in these buildings were told that they will get to stay in their spaces beyond 2019, the general manager of the buildings told PBN earlier this year.

Last year, several tenants maintained that Chicago-based General Growth was not extending leases past 2019. But General Growth later began extending leases in both office buildings.

“I think the success of ONE Ala Moana has shown that the mall is a powerful amenity,” Benn said. “Park Lane is nearly 70 percent sold, at record prices averaging $5 million per unit. With a possible rail [transit] stop near the SamKoo project on Kapiolani [Boulevard], you will have a lot of the key elements for a robust walkable community.”

South Korean developer SamKoo Development has plans to build two mixed-use high-rise projects near Ala Moana Center, which includes a total of nearly 1,000 units consisting of both affordable and moderately-priced units, a company executive told PBN in March.

“It remains to be seen, however, what the absorption rate will be for ultra-luxury condos in light of the inventory available,” Benn said. “There are a lot of options for a buyer with millions to spend, but how many buyers are there at those prices?”

Steve Sofos, president of Honolulu-based Sofos Realty Corp., told PBN that the notion of building more residential projects at Ala Moana Center seems to be a trend nationwide, as the live-work environment with housing and retail is becoming stronger in Hawaii’s marketplace.

The recently completed ONE Ala Moana condominium atop the Nordstrom parking garage and Park Lane Ala Moana are part of a growing trend of luxury residential developments being built at shopping centers in the United States.

The Wall Street Journal recently cited several projects similar to the Ala Moana projects, both developed by Hawaii developers The MacNaughton Group and Kobayashi Group. The Howard Hughes Corp., BlackSand Capital and General Growth are also involved in these projects.

The Wall Street Journal noted several factors behind the push behind this real estate phenomenon, including an uptick in the market, the growing need for developers/owners to create walkable, urban environments, as well as these residential developments becoming great investments for all parties involved, including buyers.

Duane Shimogawa
Pacific Business News

General Growth sells stake in Hawaii’s Ala Moana Center to Australian firm for $907M

General Growth Properties has sold a 25 percent stake in Hawaii's Ala Moana Center to an Australian firm for $907 million.

General Growth Properties has sold a 25 percent stake in Hawaii’s Ala Moana Center to an Australian firm for $907 million.

Ala Moana Center, the largest shopping mall in Hawaii, has a new owner, as Chicago-based General Growth Properties Inc., said Monday that it has sold a 25 percent stake in the Honolulu mall to AustralianSuper for about $907 million.

Chicago-based General Growth (NYSE: GGP) also said that it may sell an additional 12.5 equity interest in Ala Moana Center within the next 60 days to fund a pending acquisition.

Under the terms of the deal, General Growth, which owned a 100 percent stake in Ala Moana Center, will now own a 75 percent equity interest in the mall.

Kevin Berry, spokesman for GGP, told PBN that there will be no changes in the day-to-day operations of the mall.

The transaction values the 2.2-million-square-feet Ala Moana Center at about $5.5 billion, the two companies said.

GGP received about $670 million when the deal closed on Friday, with the remaining $237 million being paid in late 2016 after the mall’s Ewa wing redevelopment is completed.

The Chicago real estate investment trust said that it expects to use the funding to repay about $670 million of debt within the next two months.

In January, GGP said it has spent $391.5 million so far on its redevelopment of a former Sears space at Ala Moana Center, which will add more than 340,000 square feet of new retail space.

It also noted in its 2014 earnings report that the $573.2 million project is expected to be finished by the fourth quarter of this year.

Ala Moana Center ranks as one of the top malls in the country when it comes to sales per square foot, tallying $1,360 per square foot annually, which is good for ninth in the United States.

Its more than 290 tenants, occupying 2.1 million square feet, take in a combined total of about $2.86 billion each year.

AustralianSuper is its country’s largest industry super fund, with more than 2 million members and more than $84 billion in Australian funds under management.

PBN reached out to AustralianSuper for comment.

Last week, WP Glimcher, the Ohio-based owner of Pearlridge Center, the state’s second largest shopping mall, sold about half of its interest to an affiliate of New York’s O’Connor Capital Partners for $1.625 billion.

Duane Shimogawa Reporter – Pacific Business News

Luxury condos at Ala Moana Center to be priced between $1M and $20M

The old Sears at Ala Moana Center is seen in the early stages of its redevelopment in this file photo.

The old Sears at Ala Moana Center is seen in the early stages of its redevelopment in this file photo.

Park Lane Ala Moana, the $1 billion luxury condominium project being built on what was once a parking area at Ala Moana Center by a trio of Honolulu firms — Kobayashi Group, The MacNaughton Group, BlackSand Capital — and landowner General Growth Properties Inc., plans to price the units between at least $1 million and at least $20 million.

Up until Thursday, prices had not been revealed for the units, which will be built adjacent to the new Bloomingdale’s department store under construction at the state’s largest shopping mall as part of General Growth Properties’ (NYSE: GGP) $573 million redevelopment of its Ewa wing.

Alana Kobayashi Pakkala, partner and executive vice president of Kobayashi Group, and Brett MacNaughton, development associate of The MacNaughton Group, gave an update on the project Thursday at a NAIOP Hawaii Breakfast Forum at the Pacific Club in Honolulu.

Pakkala said that the project was years in the making.

“Back in 2001, I was sitting in a boardroom and talked about how excited I was about [the] Hokua [condominium, which was developed by Kobayashi Group and The MacNaughton Group] because of its proximity to Ala Moana [Center] and with its unobstructed views [of the ocean], but Duncan [MacNaughton, founding partner and chairman of The MacNaughton Group] brought [the Park Lane project] up and said ‘there’s one better location — at the corner of Piikoi Street and Ala Moana Boulevard,'” she said.

Pakkala noted that the developers conducted a design competition to come up with the design for Park Lane, which has 93 different floor plans.

“We thought this warranted that because it’s a once-in-a-lifetime opportunity,” she said. “The front door will be the Pacific Ocean.”

Park Lane also has some features that were used at the Big Island’s Kukio Golf and Beach Club resort community, which the Kobayashi Group also helped to develop.

“We felt we could take the best practices at Kukio and bring it here,” Pakkala said.

For instance, it is using Don Vita at Park Lane, the same landscape architect Kobayashi Group used at Kukio.

Pakkala noted that there will be a great lawn area that will be made so that one of the homeowners’ daughters will want to get married there one day.

Then there’s the actual Park Lane, which will run through the property and act as the backbone of the community.

Honolulu-based Heyer & Associates Inc., is handling sales for the project.

Park Lane, which was first reported by PBN, started construction this summer and is expected to be completed in 2016.

Located at 1388 Ala Moana Blvd., the seven eight-story buildings, which will each be 100 feet tall and have 215 units that range in size from 850 square feet to 6,000 square feet, also will include two floors of residential parking, 2.5 floors of commercial parking and amenity spaces. It also will include one commercial unit and monthly maintenance fees up to a little more than $7,500, according to public records.

Duane Shimogawa Reporter – Pacific Business News

Ala Moana Center parking levels to be completed in late 2015

This rendering shows the six ultra-luxury condominium buildings planned for a portion of Ala Moana Center. The project will have a total of 215 units, according to a building permit filed with the City and County of Honolulu.

This rendering shows the six ultra-luxury condominium buildings planned for a portion of Ala Moana Center. The project will have a total of 215 units, according to a building permit filed with the City and County of Honolulu.

Ala Moana Center parking levels to be completed in late 2015

Duane Shimogawa Reporter – Pacific Business News

Ala Moana Center’s retail parking levels, which are currently being reconstructed as part of the Honolulu mall’s $573 million redevelopment of a former Sears space, should be completed by November 2015, coinciding with the opening of the Ewa wing’s retail expansion, according to a senior director of development for mall owner General Growth Properties.

Francisco Gutierrez of Chicago-based General Growth Properties (NYSE: GGP) recently gave an update to the Ala Moana/Kakaako Neighborhood Board regarding the state’s largest mall’s renovations and expansion.

He noted that the planned condominium project on the makai side of the center from Piikoi Street to Neiman Marcus would be about 100 feet tall, which is under the current height limit, and would not require special permits.

Construction on the $300 million, 215-unit “Park Lane Ala Moana” project, which is being developed by The MacNaughton Group, Kobayashi Group, BlackSand Capital and landowner General Growth, is expected to begin mid-2014 and completed by late 2016.

The project, which has an address of 1488 Ala Moana Blvd., includes multiple low-rise towers atop the mall’s parking deck, was first reported by PBN.

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