Honolulu’s Gold Coast at the foot of Diamond Head crater
Last month I wrote an Oahu market update detailing the prior year’s slight price appreciation. I also pointed out that it takes hard work to lose money in Hawaii if you have time. In other words, don’t buy high and sell low as the Dallas Police and Fire pension funds did. But all those number-y things get confusing, so here’s a concrete example of how two units in the same building have performed over time (spoiler: GREAT).
Welcome to Waiea where two penthouses kiss the Pacific Ocean for a combined $71 million. It was here that we met Erik Hinshaw of Hawai’i Life Realtors to view these two staggering properties (the same Hawai’ian Life featured on HGTV). We? Yes, coincidentally, Dallas high-rise Queen Sharon Quist with Dave Perry-Miller Real Estate was in town poking around with a client and joined me on the tour.
There’s an old investment adage: Buy when people are selling and sell when people are buying.
On July 14, 2017, there was a fire at the Marco Polo high-rise in Honolulu that damaged some 200 units and will cost approximately $100 million to repair. It wasn’t the first. There was also a fire just four years prior in 2013 causing $1.1 million in damage. There are no sprinklers in the 1971 building. After the first fire, the HOA got an estimate to retrofit the building with sprinklers. The average cost was $8,000 per unit or roughly $4.5 million. After this fire, I think it’s highly unlikely a sprinkler retrofit wouldn’t happen. I suspect insurance companies would demand it.
Doesn’t exactly smell like a dream Hawaiian getaway, does it? What it should smell like is opportunity.
It’s that time of year again, time for the annual Hawaii roundup. For those planning for a permanent or part-time Hawaiian getaway, the past year hasn’t been too bad in the 50th state. Before you read further, pack up your tablet and head to Agu Ramen in Mockingbird Station for the full Hawaiian effect. Just opened the day before Thanksgiving, Agu’s based in Hawaii and was slathered in foodie awards before branching out to Houston and now Dallas (I have no idea why Texas was their first stop). Having checked it out before heading back to Hawaii, I can say the Dallas branch is as good as the original.
Anyway, it’s been an interesting year in Oahu real estate. The big news is in the condo market (the landing place for many second home owners). Several new high-rises have come online and their listings have flooded the market with high-priced units. As of this writing, there are 28 condos listed above $5 million. All but three of them are in new buildings. Like Dallas, all the new high-rises are high-priced. But when any ocean front/view condo hits above $1,000 per square foot, some of the new crop are hitting $3,000 per foot.
Wahoo, Hawaii! No, “wahoo” is not a place on the Islands or a Hawaiian word (that I know of) – it’s a whoop of approval, because Southwest Airlines has announced they intend to open air service to The Aloha State soon. No word yet as to which airport they will favor, but Kahului Airport in Maui is sure to be a contender, so it’s a good time to check in on vacation housing there. There’s no better place to start than Wailea, a 1500-acre resort on Maui’s southwestern coastline that’s one of the world’s leading luxury destinations. Fancy a view like this?
4141 Kilauea Rd Kauai in Kilauea, HI is currently listed for $2.350 million by Ben Welborn of Hawaii Life Real Estate Brokers. Photo Credit: Realtor.com
Does the Garden Isle have you dreaming of retirement? Whether you’re in the market for a family getaway, vacation home, or an impressive place to hold up after decades of the nine-to-five grind, Kauai’s North Shore is one of the most picturesque places you can find.
Leave town for a week and everything happens. On September 7, a third of Molokai Island was put up for sale for $260 million. The property includes 300 parcels covering 55,575 acres with over 20 miles of coastline. Granted, it’s not as showy as Larry Ellison’s 2012 purchase of 98 percent of the island of Lanai for $500-ish million, but Lanai is a bit larger at 141 square miles. A purchaser would still be able to brag about being one of the top five private landowners in the state.
Sure it’s a physically beautiful location that offers unprecedented privacy and bragging rights, but it also comes with a contentious local population who are vociferously anti-progress. Current owner, Singapore-based GL Limited found that out for themselves.
In 2015 I wrote a pair of articles about Howard Hughes Corporation’s purchase and development plans for 60 acres in the Kaka’ako section of Honolulu (here, here). The development is sandwiched between downtown Honolulu and world-famous Waikiki and is slated for 16 high-rise condo towers with 4,300 units plus over 1 million square feet of restaurants and retail being rolled out in the next 10-20 years.
Work is continuing to chug along, but there is a global softness in the ultra-luxury real estate market. What to do, what to do? In order to get the last few units sold in their first three projects, Howard Hughes is offering some sweet incentives. Of course if you’re purchasing one of these seven-figure beauties, these incentives are baubles you could easily secure yourself. But still … a sale is a sale.