A partnership between an investment firm and the federal government is enhancing some features and reducing prices at the year-old Allure Waikiki upscale residential tower as part of an effort to sell out the struggling project.
The changes are being made to the 291-unit condominium built by Chicago-based developer Fifield Cos. on the former site of the Wave Waikiki nightclub at Kalakaua Avenue and Ena Road.
Allure was among a few Honolulu condo projects caught in the economic downturn during sales and construction.
Two others in nearby Kakaako were Moana Vista, a tower where construction stalled until a new developer took over and re-branded it Pacifica, and the loft-style mid-rise Vanguard Lofts. Pacifica and Vanguard Lofts are nearing completion.
Fifield launched sales in 2007 and completed the 35-story Allure in June 2010. Property records show the developer managed to sell 113 units — or 39 percent — prior to losing ownership in November to ST Residential.
The partnership, which comprises the Federal Deposit Insurance Corp. and investment firms including Starwood Capital, TPG, Perry Capital and WLR LeFrak, took over Allure in connection with a $169 million construction loan Fifield obtained from Corus Bank of Chicago. After the bank failed in 2009, the investment firms bought a 40 percent stake in the bank’s $4.5 billion real estate loan portfolio. The FDIC retained a 60 percent stake.
"Allure Waikiki is a fantastic property in a very desirable location," Wade Hundley, ST Residential chief executive officer, said in a statement announcing the November takeover.
Since acquiring Allure, ST Residential has begun upgrading the property’s lobby, grand lanai, pool deck and some units. Upgrades include an espresso bar in the lobby and a fireplace and water fountain on the lobby’s lanai. The work is scheduled to be completed by late October and cost "several" million dollars, according to the firm.
ST Residential also reduced unit prices, according to brokers. A July price list indicated price reductions from at least $1.6 million to $1 million on a 1,616-square-foot unit, and from $912,000 to $706,900 on a 1,216-square foot unit.
Between the November takeover and late August, ST Residential has sold 36 units for prices from $569,660 to $1.45 million, according to property records.
The owner said momentum continues to build with 20 signed contracts over the past two months.
Tony Kawaguchi, an agent and vice president with Realty Executives Oahu who has had a couple of buyers pursue Allure units, said the building is challenged by limited views and some relatively small units compared with the nearby Watermark Waikiki.
"They definitely changed the look a lot — it has a more modern feel," he said of the Allure.
Kawaguchi also said the new owner is making only handfuls of units available for sale at a time to reduce the impression that there is a glut of unsold units. "That definitely should help them sell some," he said.
