Bank of Hawaii is closing its 55-year-old Kapahulu Avenue branch amid declining traffic as customers have migrated to newer branches in the area.
The state’s second-largest bank said Friday that the branch at 727 Kapahulu Ave. will close Oct. 30 and that its eight employees will be transferred to nearby branches. Customers’ accounts will be moved to the Kaimuki branch at 3600 Waialae Ave. The closest Bank of Hawaii branch to the Kapahulu location is a two-minute walk away, inside the Safeway at 888 Kapahulu Ave.
Bank of Hawaii, which owns the building and the land at the Kapahulu branch, said it anticipates putting up the property for sale by the end of September. Sean Tadaki and David Asakura of Honolulu-based Commercial Asset Advisors are the brokers.
Waikiki-based real estate consultant Stephany Sofos said asking prices for commercial real estate in the area are more than $200 a square foot, which would value the 13,586-foot parcel at nearly $2.8 million. She said because of the branch’s existing drive-thru window, the facility could be appealing to a fast-food restaurant.
“The best buyer for that location would a be a fast-food operator because it already has the drive-thru,” she said. “You don’t need to reinvent the wheel. A lot of fast-food people have been exploring that location. You already have Popeyes, Taco Bell and Starbucks in the area. So if you have one more you create a synergy in a fast-food row. The people in the neighborhood are big users of fast food.”
Tadaki, the broker, said the $200-plus-a-square-foot price that Sofos cited is based on pure land value. He suggested the parcel would fetch more because of the existing building on the property and the demand in the area.
“We’re not going to go to market with an asking price,” Tadaki said. “The market demand is so strong that we’ll let the market dictate the pricing. It’s quite surprising how much demand there is in a supply-constrained market like Kapahulu.”
Asked whether he’s already received inquiries, Tadaki replied, “The word is out.”
Bank of Hawaii, which has 65 branches statewide, has found increasing success with its 16 in-store branches, particularly the one in the Safeway on Kapahulu Avenue. In-store branches typically have longer hours and are open on weekends.
“During recent years we’ve found that more and more people are finding it convenient to combine their banking with routine errands such as grocery shopping,” Bank of Hawaii Executive Vice President Kevin Sakamoto said. “While all of our in-store branches have proven successful, this particular one (Safeway-Kapahulu) has performed exceptionally well. We have seen deposit growth of 40 percent within the last 12 months, and monthly transactions have increased by 17 percent.”
Bank of Hawaii opened its in-store branch at Safeway-Kapahulu in May 2013 after First Hawaiian Bank pulled out of that location in February of that year. The size of the in-store branch is 265 square feet, compared with the 5,400-square-foot Kapahulu branch, which opened in 1960.
Besides the Kapahulu-Safeway branch, other Bank of Hawaii branches near the one that is closing are the Kaimuki branch, which is a five-minute drive from the Kapahulu branch, and the Waialae-Kahala branch at 4634 Kilauea Ave., which is just under a 10-minute drive. Bank of Hawaii also opened a Moiliili branch in 2011 at 2470 S. King St.
