Condo cancellation doesn’t mean Hawaii real estate cycle is ending, expert says

The planned Vida at 888 Ala Moana luxury condominium tower being developed by the Kobayashi Group and The MacNaughton Group received neighborhood board approval Tuesday night.

The planned Vida at 888 Ala Moana luxury condominium tower being developed by the Kobayashi Group and The MacNaughton Group received neighborhood board approval Tuesday night.

The two three-acre sites in Honolulu’s growing Kakaako neighborhood owned by Kamehameha Schools where a developer had planned to build at least one luxury condominium tower likely won’t be developed in this cycle’s real estate boom, but at least one expert tells Pacific Business News that the cancellation of plans to develop the parcels doesn’t mean the current boom cycle is coming to an end.

On Friday, Hawaii development firms Kobayashi Group and The MacNaughton Group confirmed to PBN that they were canceling plans to build the Vida 888 Ala Moana luxury high-rise condominium project and develop a neighboring parcel. The developers, citing slow sales in recent months for the cancellation of Vida, canceled a contract with landowner Kamehameha Schools to purchase the two lots encompassing about six acres in Kakaako.

BJ Kobayashi, co-founder and partner of Kobayashi Group, previously told PBN that plans to develop the block near Vida were also being shelved.

The two firms have developed a number of successful high-end projects in recent years, including the Hokua, built during the last cycle, ONE Ala Moana, and Park Lane Ala Moana, which is currently under construction.

“Vida was an awesome project and typical of the thoughtful kind of development that I have enjoyed from [The MacNaughton Group and Kobayashi Group],Trevor Benn, president of Honolulu-based Benn Pacific Group Inc., told PBN. “However, I think that its price points had too much similar inventory and options for a somewhat narrow buyer profile.”

Price points for Vida ranged from nearly $1 million to $20 million. Competition has been tough in the luxury market in Honolulu, especially with Texas-based developer The Howard Hughes Corp. (NYSE: HHC) building two luxury towers in the Kakaako area, with two more planned to replace the Ward Warehouse retail center.

San Diego-based developer OliverMcMillan’s Symphony Honolulu luxury condo tower near the Neal S. Blaisdell Center also added to the competition for these types of units.

Sales for luxury units moved swiftly just a few years ago, but those days seem to be gone, or at least moving in the direction where demand is no longer that high.

Duane Shimogawa
Reporter
Pacific Business News

Hawaii developers cancel plans to build luxury condo tower, develop neighboring parcel

The planned Vida at 888 Ala Moana luxury condominium tower being developed by the Kobayashi Group and The MacNaughton Group received neighborhood board approval Tuesday night.

The planned Vida at 888 Ala Moana luxury condominium tower being developed by the Kobayashi Group and The MacNaughton Group received neighborhood board approval Tuesday night.

The Kobayashi Group and The MacNaughton Group have canceled plans to build the Vida at 888 Ala Moana luxury high-rise condominium project and develop a neighboring parcel that would have added a total of 500 residential units to Honolulu’s growing Kakaako neighborhood, citing slow sales in recent months, executives from the two Hawaii developers confirmed to PBN Friday.

“Primarily, it was the fact that we got off to a good start with our pre-sales, but over the past three to four months, there was a real slowdown in the market for Vida,” BJ Kobayashi, co-founder and partner of Kobayashi Group, told PBN. “Construction costs rising was probably one of the other factors.”

Construction costs in Hawaii, which jumped by a staggering 13 percent in 2014 — the highest percentage in the United States and more than double the national average.

The developers have canceled a contract with landowner Kamehameha Schools to purchase the two lots encompassing about six acres in Kakaako.

Kobayashi told PBN that plans to develop the block near Vida are also being shelved.

“We were pursuing the larger of the two projects first, [which was] Vida and [the other project] we were going to pursue after Vida,” he said. “We weren’t working on two sites simultaneously.”

The developers have met with Kamehameha Schools to discuss their decision, and said that the state’s largest private landowner “respects and supports” their decision. PBN reached out to Kamehameha Schools for comment Friday afternoon.

“We informed our buyers today [Friday] that we will discontinue sales for Vida at 888 Ala Moana Boulevard,” the developers said in a joint statement. “Vida was a luxury condominium project which was to be located on Kamehameha Schools land at the corner of Ala Moana Boulevard and Koula Street. Although the initial launch of Vida was a success with over 40 percent of the units sold, sales for this project had slowed in recent months.”

The developers noted that despite strong marketing efforts, community outreach and education about the up-and-coming Kakaako community, the market feedback indicated that it was premature to proceed with the Vida project at this time.

Expanded details emerge for Kakaako condo project

Honolulu Star-Advertiser

The latest piece of a master-planned community of residential towers by Kamehameha Schools in Kakaako has been fleshed out with details that include a putting green, guest suites and unit prices projected to start at $900,000. Detailed plans for the condominium tower named Vida were shared with the Ala Moana/Kakaako Neighborhood Board Tuesday night after an initial rough outline presented to the board last month.

The 38-story tower with about 265 two-and three-bedroom units is proposed by local development firms Kobayashi Group and The MacNaughton Group on 3.4 acres owned by Kamehameha Schools and occupied by a family of Cutter automobile dealerships bordered by Ala Moana Boulevard, Koula Street and a closed-off portion of Auahi Street.

Vida unit prices are preliminary, but the developers project a range roughly from $900,000 to $4.7 million for units with about 1,500 square feet to 1,890 square feet of living space. Duncan MacNaughton, chairman of the MacNaughton Group, said in a statement that Vida will be an “understated, yet superb” residential tower.

Planned tower amenities include guest suites, movie rooms, dining areas with a professional kitchen, children play areas, game rooms, a putting green and storage for bikes and surfboards. Shops and restaurants also are planned for commercial spaces fronting the street.

Two architecture firms, Los Angeles-based Arquitectonica and Honolulu-based Benjamin Woo Architects, produced the tower design.

“We’ve built a reputation on our uncompromising standards of quality, and Vida at 888 Ala Moana will set another benchmark of excellence for future residential communities in Hawaii,” MacNaughton said. MacNaughton Group and Kobayashi Group previously partnered to develop three Honolulu condo towers — Hokua in Kakaako, Capitol Place downtown and ONEAla Moana at Ala Moana Center. The first two were completed in 2006 and 2008, respectively, and ONEAla Moana is sold out and under construction.

Sales for Vida units are anticipated to begin later this year through Heyer & Associates LLC.

The neighborhood board voted unanimously to support the project. The developers will need to obtain a permit from the Hawaii Community Development Authority, which regulates building in Kakaako, but will not seek to deviate from any HCDArules, according to project representatives.

Two public hearings will be part of the HCDApermit process. The hearings are expected to be held later this year but have yet to be scheduled.

Vida is part of a Kamehameha Schools master plan called Our Kaka‘ako, which generally allows up to seven towers with 2,750 units within nine contiguous blocks.

Previously approved pieces of the master plan include midrise rental apartments called Six Eighty Ala Moana, a retail complex dubbed SALT, a condo tower and midrise complex called The Collection, another tower and midrise complex called Keauhou Lane and a midrise condo and apartment complex dubbed 400 and 440 Keawe.

Six Eighty was converted from an old office building and completed in 2012. SALTis under construction. The Collection is close to two-thirds sold out and projected to start construction by the end of the year. The Keauhou and Keawe projects were approved respectively in May and earlier this month.

Planned Kakaako tower draws wide support

Honolulu Star-Advertiser

A proposed luxury condominium tower in Kakaako called Vida at 888 Ala Moana had to bedesigned to avoid a Native Hawaiian burial site, but the project doesn’t appear to be facing any significant challenges following a public hearing Wednesday.

MKVida LLC, a partnership between local development firms Kobayashi Group and The MacNaughton Group, is proposing the 39-story tower with 265 units projected to sell for $900,000 to $4.7 million.

On Wednesday, project representatives presented details of the plan to the board of the Hawaii Community Development Authority, the state agency regulating development in Kakaako.

The agency, which is considering a development permit for Vida, received public testimony heavily in favor of the planned tower, which the developer said conforms to all HCDA development rules.

One potential issue was historic human burials, or iwi kupuna, that are not uncommon in Kakaako where much of the land long ago was sandy and closer to the sea before land reclamation changes.

The Vida site is on the mauka side of Ala Moana Boulevard bordering Koula Street and a closed-off portion of Auahi Street — 3.4 acres owned by Kamehameha Schools and occupied by Cutter automobile dealerships.

An archeological survey discovered 10 burials in one area on the makai/Diamond Head corner of the parcel. The developer designed the tower away from this area, which would become 19,000 square feet of landscaped open space including a protected area over the graves.

The Oahu Island Burial Council approved the preservation plan Wednesday after considering input from recognized cultural descendents of iwi in Kakaako.

The State Historic Preservation Division of the Department of Land and Natural Resources also is expected to weigh in on the preservation plan, though that does not prevent the HCDA from deciding on the development permit at a hearing scheduled for Nov. 25 at noon.

The HCDA received testimony overwhelmingly in support of Vida, including an endorsement from the Ala Moana/Kakaako Neighborhood Board. The agency received 87 written expressions of support, including a significant number from individuals tied to the construction industry or the project. About half of the letters were form letters from individuals and business owners including principals of Roberts Hawaii and the Panya restaurant chain. Six people also testified in person Wednesday to support Vida.

Gerald Kim, an orthodontist who lives in the Pacifica Honolulu condo tower in Kakaako and said he has no financial connections to the developer or Kamehameha Schools, said in written testimony that Vida will produce new homes needed on Oahu.

“I strongly feel that the Vida project will help to alleviate the growing housing shortage and allow local professionals such as myself the opportunity to live near the business center of our island,”he said.

Sarah Sarkis, a transplant from the suburbs of Boston who reluctantly moved into the downtown Honolulu condo tower Capitol Place four years ago after seeing how expensive single-family houses are on Oahu, said in written testimony that she grew to like high-rise living and wants to live in the planned Vida tower.

“Kakaako is an ideal location to expand and connect the already established neighborhoods of Ala Moana and Ward area,”she said.

The HCDA received written testimony from 11 individuals opposed to Vida, and one person expressed concerns in person.

A few opponents criticized HCDAfor advancing the date for voting on the project’s permit application to Nov. 25 from Dec. 17, arguing that the shorter timetable curtails the opportunity for community input.

“Ioppose rushing this project,” wrote Connie Smyth, a resident in another Kakaako tower, Imperial Plaza.

MKVida asked the HCDA to move up the hearing date over uncertainty whether Gov.-elect David Ige, who takes office Dec. 1, would be able to appoint four new HCDA board members in time to attend the previously scheduled Dec. 17 meeting.

Under HCDA rules, four state department directors automatically sit on the HCDA’s board or designate a representative for the seat.

Christian Chambers, an attorney for MKVida, said in the request filed last month that it would be better if board members who vote on the project are the same ones who receive the testimony from developer representatives and the public.

Chambers also said the public has had ample opportunity to comment on the project because the permit application with details has been on the HCDA’s website for several weeks.

If no hearing were held Dec. 17 because of no board quorum, the HCDA would have been under pressure to vote on the Vida permit by Jan. 19 or have it approved automatically because of a deadline in agency rules.

Wayne Takamine, an Ige supporter who said he believes HCDA has not been transparent in some past decisions, disagrees with the adjusted hearing dates. “I believe the incoming administration should have the final say,”he said in written testimony.

Ige has not commented on HCDA’s decision to advance hearing dates for the Vida project and another tower permit at Ward Centers.

If the HCDA’s board votes to approve Vida, MKVida plans to execute an agreement to buy the project site from Kamehameha Schools and start construction by March.

Kobayashi-MacNaughton’s new Honolulu luxury condo project gets nod from neighborhood board

The planned Vida at 888 Ala Moana luxury condominium tower being developed by the Kobayashi Group and The MacNaughton Group received neighborhood board approval Tuesday night.

The planned Vida at 888 Ala Moana luxury condominium tower being developed by the Kobayashi Group and The MacNaughton Group received neighborhood board approval Tuesday night.

This Project Is Currently In The Planning and Approval Phase – Please use the contact form below to be added to our ‘Interest List’ and receive updates when available

Hawaii developers the Kobayashi Group and The MacNaughton Group have received approval from the Ala Moana/Kakaako Neighborhood Board to move ahead with its Vida at 888 Ala Moana luxury condominium high-rise on a 3.5-acre site in Honolulu.

The cost of to the develop the project hasn’t been disclosed. PBN first reported on the project, which is part of Kamehameha Schools’ “Our Kakaako” master plan and still needs the approval from the Hawaii Community Development Authority.

Kamehameha Schools’ master plan proposes seven residential towers with 2,750 units and 300,000 square feet of commercial space on 29 acres on nine city blocks.

MK Development, a joint venture of the Kobayashi Group and The MacNaughton Group, purchased six acres from the state’s largest private landowner for an undisclosed price to develop two ultra-luxury mixed-use residential projects totaling about 500 units along the mauka side of Ala Moana Boulevard.

Vida at 888 Ala Moana, which will be built on a site currently occupied by a Cutter Mazda automobile dealership and service center, is one of the projects. Sales prices for the project remain preliminary, but are projected to be about $600 to $2,500 per square foot, which would be comparable to the per-square-foot sales prices per square foot at another Kobayashi-MacNaughton project, ONE Ala Moana.

The 38-story Vida tower will include 265 two- and three-bedroom units and will be designed by Los Angeles-based Arquitectonica and Honolulu-based Ben Woo Architects, which will be helping the project seek LEED certification with an energy-efficient design and features.

Amenities for the project include guest suites, movie theaters, dining rooms with a chef’s kitchen, children’s play areas, game rooms and a putting green.

Heyer & Associates LLC will be handling sales of the project, which is scheduled to begin later this year.

The Kobayashi Group and The MacNaughton Group also developed the Hokua and Capitol Place mixed-use projects in Honolulu, and are also working on a project that includes seven ultra-luxury condominium towers planned for what is now a parking area of Ala Moana Center fronting Ala Moana Boulevard called Park Lane Ala Moana, with a development cost of about $300 million, according to public records.

The project, which was first reported by PBN, is scheduled to start in mid-2014, with a completion date in 2016.

Duane Shimogawa Reporter – Pacific Business News

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The planned Vida at 888 Ala Moana luxury condominium tower being developed by the Kobayashi Group and The MacNaughton Group received neighborhood board approval Tuesday night.

The planned Vida at 888 Ala Moana luxury condominium tower being developed by the Kobayashi Group and The MacNaughton Group received neighborhood board approval Tuesday night.

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