Condo developer bullish on outlook for Kakaako

Hawaii’s burgeoning economic expansion bodes well for the long-term success of efforts to redevelop Kakaako, a top official from developer Howard Hughes Corp. said Wednesday.

The Dallas-based developer is gearing up to begin sales in December for three condominium towers planned for the first phase of its Ward Village project, a master-planned community that Howard Hughes envisions will ultimately include more than 4,000 residential units and more than 1 million square feet of new retail and commercial space in Kakaako.

Kamehameha Schools, another major landowner in Kakaako, is pursuing its own plan to redevelop parts of the area.

David Weinreb, chief executive officer of Howard Hughes, outlined his company’s 15-year master plan for the project during a luncheon address to Hawaii’s top 250 business leaders at an event presented by First Hawaiian Bank.

"We certainly think it is a great time to be doing this. It’s almost impossible to determine how long a market cycle will last but we certainly think at this point we are in the early innings of a robust and reasonably long-term period that you can see demand," Weinreb told reporters after his address.

Earlier this week, the chief financial officer for Howard Hughes said at an investors conference that at current market prices the 4,000 residential units the company plans to develop at Ward Village could theoretically generate more than $7 billion in gross proceeds for the company.

Weinreb said the figure was extrapolated from the average price for units in another Howard Hughes condominium high-rise project called One Ala Moana being built on top of the Nordstrom parking garage on Kapiolani Boulevard.

"From extrapolating what One Ala Moana sold for using an average price of about $1,200 a square foot you can come up with a number that is certainly a big number. But will it be that number? It could be less or more," Weinreb said.

The 206 units in the One Ala Moana project, with an average price of $1.6 million, sold out in a matter of hours. Asked whether he thought buyer demand for the first Ward Village units would be as strong, Weinreb wouldn’t speculate.

"It’s hard to say, but we’re hopeful that demand will be robust. And we do think there is a market for people wanting to live in this kind of community," he said.

Howard Hughes will work to relocate existing merchants as stores are demolished at Ward Centers to make room for new retail space, Weinreb said.

Plans are already underway to relocate the first two retailers to be affected, Nordstrom Rack and Pier 1 Imports.