The market for Honolulu condos makes Dallas look like Sleepy Hollow. Even the ultra-tony Bleu Ciel with its recent price hikes is only pricing its smallest unit at a meager $640 a square foot. Compare that with still-being-built Honolulu high-rises Anaha and Waiea where a 435-square-foot studio on a no-view floor will run ya nearly double that.
And while sales in Dallas for these costly homes chugs along, Bleu Ciel, Museum Tower and its kin must dream of Hawai’ian voraciousness with 2016’s Anaha already 80 percent-plus sold. After a recession hiatus, Honolulu is again seeing buyers (likely their staff) camping out on sidewalks when new blocks of units are released for sale.
The Kaka’ako Backstory
The area of Honolulu between Waikiki and downtown is called Kaka’ako and encompasses some 600 acres. Post World War II, it’s been an area of light retail, warehouses and mechanics. Over the past decade that’s changed, with many property owners selling out to high-rise development. During the Hawai’ian monarchy, the lands were gifted to the Ward family who had a plantation here. In 1957, the main house was sold to become the Blaisdell performing arts center.
Other parcels (closer to the ocean) became Ward Center and Ward Warehouse shopping centers. Those 60 acres were purchased by Chicago-based shopping center developer General Growth Properties. During the recession, their over-leveraged business was restructured in bankruptcy with the Ward property sold to Howard Hughes Corporation.
Howard Hughes is big on planned communities. In Texas they developed The Woodlands outside Houston. They have developments in 16-states. Their plan for this property is to build 22 high rises with 9,000 units over the next decade (today’s buyers really need to focus on the future of their views).
Their goals are to make neighborhood friendly areas that are (in my opinion) a bit “Disney” in their planning and precision (versus the organic nature of more established neighborhoods). The newly renamed Ward Village smacks of this with its dog parks, spas, water features and 4 acres of parks. The buyer who wants the manicured perfection of a resort in the thick of an urban beach environment, this will be the place. Me? I’m a little more rough-and-tumble.
It’s all about the bones
One of the smart things Howard Hughes did was to work with the Hawai’ian community to hammer out a plan. In Hawai’i, this is critical. Unlike the European tradition of burying the dead in designated places, the ancient Hawai’ians were more “leave ‘em where they fell.” This means that it’s VERY difficult to develop in Hawai’i and not be impacted by human remains – bones. In past developments, the bones were uncared for and often built on top of. A neighboring building to my second home talks about the bones found during construction that are likely still under the building. Today, bones are a BIG DEAL.
If a bone is found on a construction site that appears human, all work halts. If the bone is human, supervised archeological excavation is done and native Hawai’ians are brought in to ceremonially wrap each bone in taro leaves and transport it to another location for reburial. It’s a very expensive and time consuming process. Bones are one of the problems in Kaka’ako that foiled General Growth.
Howard Hughes worked with the local community to reduce the burden while doing the honorable thing for the remains.
Ward Village is using the old IBM building on the site as their sales office. Architecturally significant, they dismantled and rebuilt the exterior lattice when they renovated the building. The building isn’t that old, built in 1962, but it was designed by famed architect Vladimir Ossipoff (1907-1998). He’s Hawai’i’s most popular mid-century architect. The IBM building will be used as the sales office for the high-rises where potential buyers can see model units and finish-out selection boards.
Meaning “Reflection of Light,” Anaha will be the first of Howard Hughes high-rises and house 311-units. When completed in 2016, it will include 238 condos (studio, 1, 2, 3 bedroom) in the main building and 73 townhouses and flats edging the property on floors 2-6. The roof of these units will form the 7th floor common outdoor areas that include a dog park, pools, tennis and volleyball courts, fitness center and a full spa. In keeping with the trend, the building is targeting LEED certification with double-glazed, low-e coated glass, centralized high efficiency air-conditioning and hot water systems and LED lighting.
Units range in size from the above-mentioned 435 square foot studio to the half-floor 5,819 and 6,737 square foot grand penthouses that each also sport about 1,000 square feet of terrace. One-bedrooms are priced at $600,000 to $1 million; two-bedrooms are priced between $900,000 and $2 million; three-bedroom units from $1-4 million and penthouses (3-levels) range between $1-14 million.
It’s estimated HOA dues will run $0.92 per square foot bringing the largest penthouse in at $6,128 per month or $74,376 a year. On the upside, property taxes in Hawai’i are CHEAP. It costs just $3,220 per million in tax versus about $22,000 per million in Dallas. For many years, I happily paid Hawai’ian property taxes while I rented an apartment in Dallas. Check out all the floorplans at www.wardvillage.com. Seriously interested in buying? I know some great Honolulu Realtors.
Meaning “Water of Life,” Waiea will be the more expensive and smaller of the two when it debuts in 2017. It was designed by Vancouver architect James K. M. Cheng, Rob Iopa and WCIT Architecture. Waiea has just 171 condos and “villas” (townhouses). One-bedroom units start at $1 million, two-bedroom units will fetch $1-4 million and three-bedrooms will garner $2-7 million.
The cost for the grand penthouse is rumored to be over $20 million. The unit will stretch across two full floors encompassing seven bedrooms, eight full and two half bathrooms in 21,182 square feet that include over 3,500 square feet of terraces. The monthly HOA is estimated at $19,182 per month or on an annualized basis, more than I spent on my Dallas home!
Like the Anaha, the Waiea aims for LEED certification as well which will help keep cooling costs low in a state with exceptionally high electricity rates.
But Wait, There’s More
Most of the units in these two buildings are already sold, but as I said in the beginning, this is part of a plan to remake a portion of Honolulu that will take over a decade. Howard Hughes, even with 60 acres, doesn’t control all the land that’s being developed and there are many, many buildings coming online in the coming years. For a taste of things to come, check out this website.
And you know me. While these shiny new things appeal to most people, there are relative bargains to be had in metro Honolulu. Move away from the ocean and prices drop – of course not to anywhere near Dallas levels, but probably half the square foot costs of these two newbie high-rises. And of course, I would be remiss in not recommending looking into older buildings that have good spaces just waiting for a sledgehammer to enter their next phase of life.