Redeveloping its 30-acre piece of the Honolulu neighborhood of Kakaako is, by far, the biggest commercial real estate development project Kamehameha Schools is currently undertaking.
Walter Thoemmes, managing director of commercial real estate for the $11 billion educational-focused trust, recently told PBN in an exclusive interview, that Kakaako is turning out to be nearly exactly how it planned it to be.
The state’s largest private landowner wanted to make money in an environment that was not just about attracting luxury buyers, but instead a variety of buyers at different price points.
Thoemmes, who only has been at his current top post leading commercial real estate for Kamehameha Schools for a few months, credits his predecessor, Paul Quintiliani, who moved to California to be closer to his family, as the reason for the success in Kakaako.
“It was really Paul and his team that really understood that and structured deals that way,” he said. “If you looked at them side by side, there’s The MacNaughton Group and Kobayashi Group’s luxury project right next to The Howard Hughes Corp.’s luxury projects. Then there’s Alexander & Baldwin Inc.’s The Collection, a step down, Castle & Cooke Inc. and Stanford Carr Development’s projects that we’re doing rentals as part of those two projects.”
Rentals are a good type of housing product for Kamehameha Schools because it can maintain an ownership in the property.
“That is an important consideration when you think of our heritage,” Thoemmes said. “[Bernice “Pauahi” Bishop] only left us land. This whole financial portfolio came from forced land sales. We take the selling of land seriously, so we can have the opportunity to maintain the community and make money on land we own.”
Retail is another strong product for the trust because it is a long-term stabilized cash flow for them.
“We couldn’t get that out of Kakaako until you built the rooftops,” Thoemmes said. “Our plan is 2,750 units. That level of density and resident population will support the commercial we envision in the area for a long time.”
An example of its retail presence being built up in the area is its Salt at Our Kakaako restaurant and retail complex, which is in its final stages.
Retail tenants that fit in with Kamehameha Schools’ plan in Kakaako are resident-servicing, local if possible.
“The things you and I live with, not the big box,” Thoemmes said. “We want more resident-servicing and we’re not done yet.”
Duane Shimogawa
Reporter
Pacific Business News