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Hawaii developers debate whether Oahu will have enough homes for its growing population

May 23, 2013, 2:14pm HST
Duane Shimogawa  |  Reporter- Pacific Business News

Most of the big guns in Hawaii’s housing market were out in full force Thursday at Honolulu’s Plaza Club talking about what’s mostly on everyone’s minds these days on Oahu, especially with the slew of planned condominium developments slated for Kakaako, “The Third City.”


Moderator Harry Saunders, CEO of Castle & Cooke Hawaii, opened the panel discussion with the one word that describes his confidence in all of these residential developments: Can.

The 2013 Update on Housing in Hawaii by ThinkTech Hawaii and the Hawaii Venture Capital Association, featured such panelists as Hawaii economist Paul Brewbaker; developer Stanford Carr; Hawaii Community Development Authority Executive Director Anthony Ching; Kamehameha Schools Director of Real Estate Development Paul Kay; Howard Hughes Corp. Senior Vice President of development Nick Vanderboom; Forest City Hawaii President Jon Wallenstrom; and Pacific Resource Partnership Executive Director John White.

Brewbaker, “Mr. Fancy Slides,” led off the event with the provocative question: Will Oahu have enough condos/housing for its future projected population?

This question is usually on the opposite end of the spectrum, with most asking if there will actually be enough people to absorb all of these units, especially in Kakaako with more than 4,000 planned units. He says that one of the main reasons that there will be enough housing is the fact that inventory levels, which are currently at two months in some areas, are as low as they’ve ever been.

“Developers are going to want to drop their projects now,” Brewbaker said.

He pointed out that it’s sort of like a race out there and developers shouldn’t wait or they’ll be last to the table.

The challenge, though, is getting regulatory approvals in a timely manner and to builders as soon as possible, Brewbaker said.

Meantime, Carr noted that the challenges in the housing market include the possibility of a labor shortage and construction costs.

“If you haven’t bought now, buy now,” he said of the housing market. “We can look for price increases and there’s been multiple offers, lots of overbidding of the asking price.”

Carr also says that government can help by facilitating the certainty of entitlements.

“That uncertainty causes risk management,” he said.

Ching, who sits in the regulatory chair for the HCDA, says that from his perspective, the state agency is trying as hard as it can in this critical area.

Both Kay and Vanderboom, who work for big players in the Kakaako area, said that the many planned developments in the area will make every developer better as they compete against each other.

“Urban-core living leads to a reduction in traffic, which leads to better overall quality of life for everyone on Oahu,” Kay said.

Wallenstrom, whose firm was picked to build the 690 Pohukaina planned rental housing project in Kakaako — which may include the state’s tallest building — said whenever he’s in talks with financiers for possible projects, the jobs question almost always comes up first.

“We don’t build enough housing to keep our young folks here,” he said. “It’s a tough situation, [so] we’ve got to tie housing and job growth and bring it all together to make it work.”

Finally, White pointed out that stakeholders have to tell the story of how housing improves the quality of lives.

“Two-thirds of Oahu residents support some type of growth,” he said. “[But] too many do not feel like they will benefit from the housing and growth [and] too many won’t be able to afford [it].”

White noted that there are about 340,000 homes on the ground today and that Oahu needs to add 33 percent more homes to meet future demands.

The Howard Hughes Corporation announced its “forWARD” vision for Ward Village

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www.AVisionForward.com

The Howard Hughes Corporation announced its “forWARD” vision for Ward Village in October 2012, revealing plans to create a vibrant neighborhood offering unique retail experiences, exceptional residences and affordable housing set among dynamic public open spaces and pedestrian-friendly streets. Ward Village will incorporate principles of sustainability and cultural respect that honor the rich history of the land. The project is planned to be built out over the next decade. When complete, Ward Village will double its retail, dining and entertainment space, providing a compelling mix of local neighborhood shops, restaurants and national retailers to serve locals and visitors alike. In preparation for the renovation, The Howard Hughes Corporation has been working to provide assistance to tenants affected by the project who are moving to other locations within Ward Centers.

ABOUT THE HOWARD HUGHES CORPORATION
The Howard Hughes Corporation owns, manages and develops commercial, residential and mixed-use real estate throughout the U.S. Our properties include master planned communities, operating properties, development opportunities and other unique assets spanning 18 states from New York to Hawai‘i. The Howard Hughes Corporation is traded on the New York Stock Exchange as HHC and is headquartered in Dallas, TX.

For additional information about HHC, visit www.howardhughes.com

SAFE HARBOR STATEMENT
Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “expect,” “enables,” “realize,” “plan,” “intend,” “transform” and other words of similar expression, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s expectations, estimates, assumptions and projections as of the date of this release and are not guarantees of future performance. Actual results may differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially are set forth as risk factors in The Howard Hughes Corporation’s filings with the Securities and Exchange Commission, including its Quarterly and Annual Reports. The Howard Hughes Corporation cautions you not to place undue reliance on the forward-looking statements contained in this release. The Howard Hughes Corporation does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.

Hawaii No. 5 for home-price increases in March | CoreLogic

May 7, 2013, 2:44pm HST
Staff Pacific Business News

Hawaii was among the top five states with the highest home price appreciation in March compared to the same month in 2012, according to a report by CoreLogic.

Hawaii was ranked No. 5 among states for home price appreciation when sales of distressed properties were factored out, with an appreciation of 14.3 percent in March, Irvine, Calif.-based CoreLogic (NYSE: CLGX) said.

Nevada was No. 1 with 20.8 percent, followed by California with 16.8 percent, Idaho with 16.3 percent and Arizona with 15.1 percent.

When distressed sales were included, Hawaii’s home price appreciation rate was 13.4 percent.

Nationally, home prices increased by an average of 10.5 percent in March, including distressed sales, compared to a year ago. When distressed sales were factored out, the national average home price appreciation rate rose to 10.7 percent.

“For the first time since March 2006, both the overall index and the index that excludes distressed sales are above 10 percent year over year,” Mark Fleming, chief economist for CoreLogic, said in a statement. “The pace of appreciation has been accelerating throughout 2012 and so far in 2013 leading into the home-buying season.”

Dean & DeLuca will enter Hawaii market at Ritz-Carlton Waikiki project

Dean & DeLuca plans to open its first Hawaii store in Honolulu, seen in this rendering, at The Ritz-Carlton Residences, Waikiki Beach, project that's set to open in late 2015 or early 2016.

 Apr 24, 2013, 12:25pm HST
Dean & DeLuca will enter Hawaii market at Ritz-Carlton Waikiki project

Janis L. Magin  |  Managing Editor- Pacific Business News

New York-based gourmet market Dean & DeLuca plans to open its first store in Hawaii in The Ritz-Carlton Residences, Waikiki Beach, hotel condominium that’s being developed next to the Luxury Row at 2100 Kalakaua Ave.

Dean & DeLuca said Wednesday that it also plans to open “multiple locations” in Hawaii that will include markets, cafes and new formats in the future with developer Avancer Group.

“We’re looking forward to being in the heart of this world-renowned community with its rich culture and food scene, and becoming a go-to destination for visitors and neighborhood shoppers,” Geoffrey Upham, managing director international for Dean & DeLuca, said in a statement.

The Dean & DeLuca store is set to open in late 2015 or early 2016, when the 38-story Ritz-Carlton project at 2121 Kuhio Ave. is scheduled to be completed.

Developer Pacrep LLC opened a two-story sales office for the project Wednesday at Luxury Row, whose retail tenants include Tiffany & Co., Chanel, Gucci, Yves Saint Laurent and Coach.

Prices for the 309 units start in the $500,000s for a one-bedroom unit and go up to more than $15 million for the penthouse units.

Dean & DeLuca has stores in New York City, Washington, D.C., Napa Valley, Calif., Charlotte, N.C., and Kansas City, Mo. in the United States, as well as stores in Japan, Thailand, South Korea, Singapore, Turkey, Kuwait, The United Arab Emirates and Qatar.

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Tradewind Towers How our high-rise future stacks up--or not

Honolulu ranks #6 among American cities for its number of high-rises–472 buildings at least 12 stories tall–ahead of Philadelphia, Boston and Dallas. The thicket is about to get a lot thicker.

The Kakaako district, where a phalanx of residential towers popped up over the past 20 years, is now slated to go solidly vertical with the addition of as many as 30 more high-rises. Gigantism threatens Waikiki, too, clotting its spindly 1970s core with Kyo-ya’s controversial plan for two new towers. In March, the City’s Department of Planning and Permitting rubber-stamped a 37-story slab of luxury, the Ritz-Carlton Residences at 2121 Kuhio, which will occupy the corner where the old Hula’s banyan tree once stood.

Then there’s the transit-oriented-development (TOD) planning underway, which anticipates private, high-density development in close proximity to each of HART’s 21 elevated rail transit stations–a string of mini-cities out to Kapolei.

All this will mean lots of new high-rise apartment buildings. But what kind of high-rise living do we want? Do we want to give up the tradewinds and live in hermetically sealed, air-conditioned glassy monoliths, as if we’re twice-a-year “residents” from Singapore or Palo Alto?

Or do we want something more organic, innovative and radically sustainable–something like so many of Honolulu’s older, air-cooled high-rises–you know, the ones built mainly in the late 1950s through the 1970s, with the corridors open to the elements so the breeze can blow right through, so no need AC?


Tall and breezy

“Honolulu has an extraordinary climate like no other city in the world. It’s so stable and so delightful. Amazing!” says noted international architect César Pelli, who had a hand in the design of two of Honolulu’s breezy best: the Ala Wai Plaza (1970) and the Banyan Tree Plaza (1976). The two share many qualities, notably their “single-loaded” corridors–exposed exterior lanai-ways serving units on only one side of the building.

In a phone interview from his office in New Haven, Connecticut, Pelli, now 87, recalls how he came up with his designs. “Honolulu, I must admit, was secondary to its climate, and the buildings I designed there were designed to take full advantage of it, to depend on natural air and to have lanai spaces, which are a very Hawaiian development.”

As a design architect at the Los Angeles firm of Daniel Mann Johnson & Mendenhall (DMJM), Pelli drew from scratch the Ala Wai Plaza, a two-tower apartment complex at the foot of University Avenue overlooking the Ala Wai Canal. Rigorously schematic, the crisp, white concrete grids on the outward facades frame recessed window-walls and lanai spaces, neatly expressing the two-story living units within. On the mauka side of the buildings, an innovative, two-story system for each “floor” of apartments allows for recessed exterior corridors on one level and a full-width second-floor interior above it, with makai and mauka windows–and views. Dramatic glass elevator towers stand free of the buildings, tethered by sky bridges.

Born in Argentina, Pelli says Le Corbusier was a big influence. He cites the great modernist’s humane innovations in corridor placement and flooring plans that efficiently captured natural cross-ventilation and multiple views.

The Ala Wai complex was intended to attract University of Hawaii faculty, Pelli says, “so it had to be economical for young people. That’s another thing that guided my design.”

Asked about the street noise, dirt, mold, and safety and fire codes repeatedly used to justify air-conditioned housing, Pelli says, “That’s terrible and stupid. You must be able to open the window! Natural ventilation is very important and so easy to achieve in Hawaii.”

Six years after Ala Wai Plaza (AWP), DMJM finished the imposing 36-story Banyan Tree Plaza (BTP) at the corner of Punahou and Beretania streets. By most standards, it’s a luxury building, with units ranging from studios up to four bedrooms, a pool deck, meeting rooms, parking and a gym. But its low monthly maintenance fees reflect the fact that 36 floors’ worth of common areas are naturally lit half the time and naturally cooled all the time, so there’s low lighting cost and no expensive central AC. 80 percent of BTP’s 240 units do not have AC units, according to building manager Ron Grimes.

With its own expressive white-concrete geometry, its vestigial version of the same glass elevator towers, and its single-loaded design, BTP looks like a cousin of AWP, though Pelli said he had no memory of it–as it turns out, his protege Tony Lumsden designed BTP for DMJM after Pelli left the firm. Recently, when shown a picture of BTP, Pelli acknowledged the similarity and said he was “delighted to see that Tony designed a very handsome building.”


Lanai stacks

Single-loaded, high-rise apartment buildings are ubiquitous in Honolulu. Notable examples include the Sans Souci, Colony Surf, Waipuna, Wailana and Diamond Head Vista, and 1717 and 2121 Ala Wai Blvd., all in Waikiki. Then there are 1001 and 1010 Wilder Avenue, Uraku Tower, the Fairway House, Kahala Towers and Kuhio Park Terrace. The Punahou Circle condominium, where President Barack Obama grew up, is single-loaded. Two of the simplest and purest buildings of the type are two nearly identical slim slabs hard by the Ala Wai Canal: the 16-story Atkinson Tower at 419A Atkinson Drive, circa 1959, and the 12-story Ala Wai Manor, circa 1965, at 620 McCully Street.

According to the Hawaii Modernism Context Study (Historic Hawaii Foundation, 2011), Honolulu’s first such apartment house was the 12-story Oahuan Tower at 1710 Makiki Street, built in 1957, which “facilely adapted the typical walk-up design with its lanai-corridors to a high-rise situation by simply adding more floors.” These are the lanai-stacks we’ve all come to know, the vernacular buildings of high-rise Honolulu.

Kazi Ashraf is a Bangladeshi architect and professor of architecture at UH Manoa. He lives in the Contessa apartment tower on King Street, which is “double-loaded,” with enclosed corridors serving units on both sides. He describes himself as “a student of the city.”

Ashraf waxes critical about Honolulu and its tattered matrix: “You walk down the street and you have a building, and then you have a patch of grass, then the sidewalk disappears. That’s an insult.” He continues, “Most of the tall buildings come down to the ground as garages. It’s a kind of an arrogant attitude.”

Still, Ashraf believes Honolulu is blessed by its situation between the Koolaus and the sea, and its gorgeous vantage points. He says he is in favor of tall buildings and what he calls the “phenomenology” of them: “I live on the 11th floor of this very unremarkable building on this very unremarkable street, but as I go up, I’m kind of lifted away from it all, and I can see the mountains, I can see distant Waikiki. There’s an experience about being in a tall building that is definitely something to consider and to value.”

The professor is not an admirer of Honolulu’s single-loaded lanai-stacks. “It’s very disturbing to me, that model,” he says. He objects to the lack of privacy in them and their stacked repetition.

“The scheme does not come from the concept of a tall building, it comes from the concept of a building on the ground with a corridor, so you go up two stories and it’s a walk-up, but then you keep stacking it up.” Ashraf has some radical solutions to the problems of privacy in single-loaded buildings, including pulling the corridors away from the apartments, that he sketches quickly on a page of my notebook.

He agrees with Pelli that natural cooling and ventilation should be a central concern for developers and architects working in Honolulu, but “it’s not,” he says. “There should be discussions, public forums, exhibitions, so we can begin to answer the question: ‘What kind of city does Honolulu want to be?’”


Up in the airless

The busy Honolulu firm Benjamin Woo Architects takes credit for the million-square-foot, blue-glass Capitol Place condominium downtown and is listed as architect of record for the 782,000-square-foot Trump Tower in Waikiki and the million-square-foot Hokua condominium on Ala Moana Boulevard. (The actual designs for the Trump and Hokua towers were done by mainland firms; Woo does the working drawings and makes sure codes are followed.) The firm is at work on several other planned towers, including the 43-story Waihonua condo now under construction, the state-sponsored Pohukaina project in Kakaako, and 23-story One Ala Moana going up next to Nordstrom at Ala Moana Center. The latter has reportedly already sold out, with Facebook founder Mark Zuckerberg having bought multiple units, and Howard Hughes Development Corporation has said it expects a profit of $66 million.

In their fifth-floor conference room in the landmark IBM office building, I met with Ben Woo and senior project manager Masato Tochika to talk about high-rise apartment buildings and what might be done to make them greener and less hermetic. Given our amazing climate, the new technologies out there, and the imperative for sustainability, I asked, is it possible that we’ll see some sort of innovative, radical new designs in Honolulu? Maybe some wild, cage-like structures that let the wind blow right through?

“I’m not sure if Hawaii’s ready for that,” Woo says. Tochika says he lives in a high-rise building in Nuuanu, where he rarely uses the AC and keeps his windows open all the time, “But that’s in Nuuanu, up 20 floors. It’s different in McCully or Kakaako, where you have heavy traffic from early morning to late at night, and you keep the windows closed to shut out the noise.” Tochika points out that Japanese customers believe they “must have air conditioning, even if they only use it five times a year.” Woo adds that, by law, high-rise windows can only open four inches for safety reasons.

We get deep into the weeds on the energy savings that can accrue in HVAC (heating, ventilation, and air-conditioning) systems. Along with water heating and lighting, HVAC is where new technology and retrofits can reduce electrical costs dramatically. For example, among buildings with central AC, most don’t have individual unit metering, a situation that discourages conservation and encourages waste. Woo says that they’re putting meters into One Ala Moana.

Explaining the difficulty of managing a building’s electrical and mechanical loads, Woo says that the occupancy rate in a luxury building like Hokua varies from around 50 percent “ a majority of the time” to 80 or 90 percent during the Christmas holidays. Nevertheless, a two-bedroom in Hokua is currently for sale for $2.8 million.

The conversation turns to natural ventilation and how 50 percent of Oahu homes are now artificially cooled, versus 5 percent in 1970. “I guess that’s because minds change,” Woo says, “and people now equate air conditioning with luxury. When we were growing up, nobody had AC.”


Cross currents

“In several of our buildings, we’re looking at using natural ventilation in the corridors, which has the potential to drastically reduce energy use,” says Nick Vanderboom, the 30-ish, Honolulu-based, senior vice president of development for the Howard Hughes Development Company. The former USC football star has a kuleana that includes the planned development of 9.3 million square feet of real estate, including 4,000 residential units covering 60 acres in Kakaako. He confirms that the master plan for “Ward Village” includes 22 towers, though that number is flexible, he says.

“We’re conscious that electricity in Hawaii is about three times the national average in terms of cost,” Vanderboom continues. Not only is natural ventilation “an environmentally responsible thing to do,” he says, “but from a marketing standpoint, it could be a very attractive thing if we’re able to lower energy costs for our homeowners.”

I ask if Hughes’s architects and planners are thinking about serious natural cooling; that is, single-loaded residential buildings. “That depends on the site,” Vanderboom answers. “A single-loaded building is less efficient in terms of the ratio of livable space, so you end up using more material per unit. But I do think there’s an opportunity for hybrid, somewhat double-loaded buildings that could still bring the ventilation in. There are also opportunities for cross-ventilation that we’ve been looking at,” he offers.

I bring up the example of architect Warner Boone’s towers from the 1970s–the Diamond Head Vista and the twin-towered Royal Iolani, with its mauka elevator towers and compact corridors, open to the elements, from which the units fan out makai in two different directions.

He’s aware of them.

I repeat the question I put to Woo and Tochika about innovative, new, high-tech design: “How wild are you willing to go?” Vanderboom’s answer is smooth, if promising: “We are very interested in exploring innovative design and exploring things that haven’t been done in high-rises here recently, or ever. We have tremendous incentive.”

Let’s hope that developers, engineers and architects can all find similar incentive, financial and otherwise, to invent some new Hawaiian houses in the sky, letting the trade winds blow right through.

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Honolulu has sixth-strongest local economy in the United States

Honolulu has sixth-strongest local economy in the United States
Stephanie Silverstein  |  Reporter- Pacific Business News

Honolulu has the sixth-strongest local economy in the country, according to the On Numbers Economic Index, which offers a monthly snapshot of the economic health of 102 major markets.

Honolulu moved up a notch in March from its February ranking of No. 7 in the analysis, which is conducted by an affiliate of Pacific Business News.

Ahead of Honolulu are Austin, No. 1; Provo, Utah, No. 2; Houston, No. 3; Oklahoma City, No. 4; and Dallas-Fort Worth, No. 5.

The On Numbers Economic Index tracks conditions, including private-sector job growth, unemployment, earnings, housing appreciation, and construction and retail activity — in the metropolitan areas with populations greater than 500,000 people.

Based on that criteria, Hawaii’s strong tourism industry and our international visitors’ attraction to shopping destinations in Honolulu including Kalakaua Avenue and Ala Moana Center are likely a good part of the reason we jumped up a notch.

In an unrelated report also issued on Friday, the University of Hawaii Economic Research Organization released a construction forecast that projected a continued rebound in that sector.

California developer Franco Mola plans to build workforce housing in Kakaako

Duane Shimogawa  |  Reporter- Pacific Business News
Apr 2, 2013, 1:54pm HST

A California-based real estate developer is planning to demolish several existing single-story industrial buildings and develop a 20-story, 217-unit workforce housing condominium project with ground-floor retail space in the Kakaako neighborhood in Honolulu.

The property, at 803 Waimanu St., encompasses a little more than 21,000 square feet.

It was once on the market for $4.8 million, according to the commercial real estate property website LoopNet.

Kakaako Properties For Sale

The planned project also includes parking for 245 vehicles.

According to the plans, there will be no amenities and the ground floor may include a convenience store such as a 7-Eleven.

“It seems like these types of projects are catching on,” Hawaii Community Development Authority Director of Planning and Development Deekpak Neupane told PBN. “I think as far as affordable housing goes, it’s a good project.”

It will include studio, one-bedroom and two-bedroom units. Neupane says that a two-bedroom unit would go for about $350,000.

Construction is slated to begin in the first quarter of next year and be done in 24 months.

The HCDA has scheduled a public hearing at which the developer, Franco Mola’s MJF Development Corp., will present its plans on May 1 with decision-making scheduled for June 5.

MJF Development could not be reached for comment.

Mola is no stranger to the Hawaii market, as he once had plans to redevelop the former Honolulu Advertiser property on Kapiolani Boulevard into a two-tower commercial and residential complex, which is now a project headed up by Hawaii developer Marshall Hung.

Kakaako Properties For Sale

Condo planned for former Honolulu Advertiser site sells out

Condo planned for former Honolulu Advertiser site sells out
Staff Pacific Business News  |  Mar 27, 2013, 7:15am HST

This rendering shows Downtown Capital LLC's 801 South St. project, which will be built on the site of the former Honolulu Advertiser building in Honolulu.

The developer of an affordable condominium tower planned for the site of the former Honolulu Advertiser building said 697 entries for prospective purchasers were pulled in a weekend lottery to select buyers for owner-occupied units in the 801 South St. project.

The Honolulu Star-Advertiser reports the entries, combined with earlier purchases, are more than enough to sell all 635 units in the 46-story project, according to Ryan Harada, principal with Downtown Capital LLC.

The newspaper reports construction is scheduled to begin on June 1, after the lease on the property expires for the CBS television program "Hawaii Five-0,"which has been using the property as a soundstage.

 

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