Luxury high-rise condominiums planned in Kakaako have been big sellers this year. Really big. So big that a single developer has sold $783 million worth of residences slated for completion in 2016 and 2017.
Howard Hughes Corp., the Texas-based development firm transforming the Ward Centers retail complex into a largely residential neighborhood called Ward Village, proclaimed the big haul Monday in a financial report that shows just how strong and stunning the market for luxury high-rise living in Hono­lulu has become.
"The rich have come back," said local housing market researcher Ricky Cassiday.
Cassiday said he isn’t surprised at the strength of Oahu’s real estate market, though he didn’t expect Hughes Corp. to achieve such sales as quickly as it did, in part because of how high some Ward Village condos are priced.
"Ultra luxury" penthouses in a Ward Village tower named Waiea include one advertised for $19.8 million and a grand penthouse spanning the top two floors with an unpublished price that one prospective buyer said is just under $100 million.
"Those are wild prices," Cassiday said. "They are asking for a lot of money for a lot of units."
Cassiday said strong demand for record-priced luxury homes on Oahu has been demonstrated in the last couple of years with fast sellouts of two projects: ONE Ala Moana and the Ritz-Carlton Residences Waikiki Beach.
At ONE Ala Moana, it took about two days in late 2012 to sell 206 units, including one for about $9 million, in the 17-story tower that is almost finished on top of the Nordstrom parking garage at Ala Moana Center. (Hughes Corp. is a partner in the development of ONE Ala Moana.)
At the Ritz Waikiki, 85 percent of units priced from about $650,000 to $15 million were sold in mid-2013 during an initial weekend of sales, which led the Los Angeles-based developer of that project to pursue plans for an adjoining second tower where the top unit is priced at $20 million.
In Kakaako, Hughes Corp. launched sales for its first two Ward Village towers — Waiea and Anaha — in February. On Monday the company disclosed in an earnings report that between 70 percent and 85 percent of units in the towers were sold as of Nov. 1.
HIGH-PRICED UNITS
| BUILDING |
UNITS |
TOTAL |
AVERAGE PRICE |
| |
SOLD |
UNITS |
OF SOLD UNITS |
| Waiea |
141 |
171 |
$3.6 million |
| Anaha |
221 |
311 |
$1.2 million |
Source: Howard Hughes Corp.
|
At Waiea the company sold 83.6 percent, or 141 units, in the 171-unit tower for a combined $516 million. That equates to $3.6 million per unit on average, which does not include the grand penthouse, which is still available.
At Anaha, 71 percent of units, or 221 of 311, have been sold for a combined $267 million. That equates to an average $1.2 million per unit.
David Striph, senior vice president in Hawaii for Hughes Corp., said sales have exceeded the company’s expectations and that buyers are quite excited to see construction of their future homes begin.
"We are excited to play a role in delivering homes to support the need for urban housing on Oahu," he said in an email. "Ward Village has brought significant economic growth and increased public amenities to the neighborhood, revitalizing this growing community."
Hughes Corp. in its earnings report said it has collected $139 million in nonrefundable deposits on all the sales, which won’t close until the towers are completed.
The company is using deposits to initially fund construction, and announced Monday that it has obtained a $600 million construction loan from Blackstone Real Estate Debt Strategies to help finance the two towers, projected to cost about $400 million apiece.
Construction began on Waiea in June on what was a parking lot fronting Ala Moana Boulevard on the Diamond Head side of Ward Warehouse. The 36-story tower is projected to be finished in late 2016.
Construction on Anaha started Saturday. The 38-story building will rise on the corner of Kamakee and Auahi streets where a Pier 1 Imports store used to be, and be completed in early 2017.
Hughes Corp. has a third tower at its Ward property approved for development called 988 Halekauwila on the corner of Ward Avenue and Halekauwila Street. This tower with 424 units will largely satisfy a state requirement to produce moderate-priced housing.
Hughes Corp. recently said it is trying to obtain financing for 988 Halekauwila through the federal Department of Housing and Urban Development in a process that is expected to take a year and allow construction to start before the end of next year.
Given the strong results for the initial two luxury towers, Hughes Corp. has sought permits from the Hawaii Community Development Authority, the state agency regulating development in Kakaako, for three more towers. One of those towers is tied to a planned Whole Foods Market natural foods store mauka of Waiea. The other two towers would replace most of Ward Warehouse fronting Ala Moana Boulevard and overlooking Kewalo Basin small boat harbor.
Hughes Corp. has a $7.5 billion master plan approved by HCDA in 2009 that allows up to 22 towers with 4,300 residential units and 1 million square feet of retail space on 60 acres comprising Ward Centers. The company anticipates that it can complete full build-out in 12 to 15 years subject to market demand.
