Lack of sales cancels Kakaako condo tower project
STAR-ADVERTISER / MAY 8
Ian MacNaughton, left, Managing Partner of The MacNaughton Group and Duncan MacNaughton, Chairman of the MacNaughton Group stand on “lanai”, with simulated view in the sales showroom for the Vida Tower in Kakaako.
STAR-ADVERTISER / MAY 8
Ian MacNaughton, left, managing partner of The MacNaughton Group, and Duncan MacNaughton, chairman of the MacNaughton Group observe a simulated view of the Vida Tower in Kakaako in the sales showroom.
The developer of a planned luxury condominium tower called Vida at 888 Ala Moana in Kakaako has canceled the project due to insufficient buyer interest nine months after sales began.
Kobayashi Group and the MacNaughton Group, two local development firms that partnered to produce the Vida project as MKVida LLC, announced their decision today after informing buyers.
“Despite strong marketing efforts, community outreach, and education about the up-and-coming Kakaako community, the market feedback indicated that it was premature to proceed with the Vida project at this time,” the companies said in a joint written statement.
The development firms said a little over 100 buyers signed sales contracts for the 262-unit tower, or about 40 percent of the project where unit prices ranged from $988,000 to more than $4 million excluding penthouse units.
Nearly all the sales volume for Vida occurred soon after sales began in May, and with no continued momentum the development team said they wouldn’t be able to start construction and deliver homes to buyers in a timely manner.
Officials with Heyer & Associates LLC, the project’s exclusive broker, reported in May that buyers snapped up about 90 units in the first four days of sales after an initial 129 units were released for purchase.
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At that time, the developer projected that construction would begin sometime between October and December to allow the tower’s completion in early 2018.
Kobayashi Group and MacNaughton Group officials said they are refunding all buyer deposits.
Vida was slated to be built on 3.4 acres owned by Kamehameha Schools on the mauka side of Ala Moana Boulevard bordering Koula Street and a closed-off portion of Auahi Street. The site had been occupied by Cutter automobile dealerships that were relocated to make way for the tower.
Kamehameha Schools owns nine blocks in the area covering 29 acres, and is in the initial stages of redeveloping the land largely occupied by warehouses into a community under a master plan called Our Kakaako with up to seven residential towers and 2,750 homes. Pieces of the plan that are taking shape include completed midrise rental apartments called Six Eighty Ala Moana, a partially open retail complex dubbed SALT, and three residential projects under construction — a condo tower and midrise complex called The Collection, another tower and midrise complex called Keauhou Lane and a midrise condo and apartment complex dubbed 400 and 440 Keawe.
MKVida principals said they appreciate the confidence that Kamehameha Schools had in the Vida plan, and suggested that they may be a part of Our Kakaako in the future. “We continue to believe in the vision for Kakaako, and remain committed to its future,” the company said.
91 responses to “Lack of sales cancels Kakaako condo tower project”
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And so it begins
You are so right…unfortunately with the Chinese economy tanking, oil prices dropping, and a general malaise in global growth, our dependence on foreign money for development is about to be rudely shaken. Well, ignore the locals and cater to off shore investors. A lot of rich folk made money and are no doubt insulated against this kind of downturn, us Average Joes will take it where the sun don’t shine as usual.
Not going to end very well, neither.
I guess people aren’t as happy as builders would think about makes Honolulu into NYC.
Not enough customers willing to pay that much for condos, at this point in time.
More like, “Not enough gullible customers willing to over pay that much for bland condos, at this point in time.”
Not even the Chinese since their economy is tanking.
If a local person were to buy any of those condos they would end up in foreclosure eventually. It’s history repeating itself. Remember the names McNaughton and Kobayashi. They ain’t building nothing for the people who really need housing. Just make money with the politicians.
China’s economy has been slowing for the last three years.
Ever!
You left out remember the name Kamehameha – they are at the foundation of this. I wonder how a tax exempt charity distributes the billions it takes in when it only spends a fraction of it on the schools. Who gets the rest of the billions?
Mythman, get your facts straight. Kamehameha Schools does pay taxes on its commercial endeavors. There are many entities within the infrastructure that are commercial and many that are not commercial. Kamehameha Schools is the largest private landowner in the state. Most of it is conservation land.
Really? Not the average person anyway. These were meant for outside investors not the locals. Who the heck makes that kind of money working in Hawaii.
the guys developing the condos
Multi generational family could group their money together and be able to afford a unit. They would need five parking stalls.
At least New York had plastic bag at every store.
Maybe we’re getting near the price ceiling…I hope. This kind of pricing where base models start at a million dollars certainly can’t be sustained through the local population, and maybe these units are too pricey now even for investors. Which is good for the local people if that’s the case, because it will force developers to build more affordable homes. I’m a little disappointed in Kamehameha Schools for participating in pushing the land values so high…they’re supposed to be caretakers of the Hawaiian people, but they’re pricing their targeted beneficiaries out being able to stay in their land. They have SO MUCH money and I don’t see them investing it back into the population as much as you’d hope they would.
Their motto is “Every man for himself”.
Every puppy for themselves, too.
I guess they couldn’t round up enough foreign and mainland buyers.
Let’s see … In the past nine months since this condo went on the market the Chinese Yuan has devalued and the Chinese stock markets have been pummeled. Anyone else see a correlation? Duh!
We are able to round up the homeless without ant effort here on O’ahu. Homeless would not mind living forty stories up in the condo.
Got lots of Round Up in Hawaii.
Thank goodness! Caldwell is rubber stamping these projects with little to no regard for infrastructure issues like traffic and sewage. We need to get him out of office…ASAP!
Caldwell has nothing to do with these projects. Kakaako is under the jurisdiction of the Hawaii Community Development Authority (HCDA), a state agency. The City and County of Honolulu and Mayor Caldwell does NOT approve development permits in Kakaako, only HCDA approves such permits. Get the facts straight.
They still have to follow building codes and will use city water and sewer. Your facts are wrong.
No you don’t get it. All of the discretionary permits and approvals are done by HCDA. Code enforcement is none discretionary, the Mayor cannot waive code requirements. All of that great infrastructure in Kakaako was put in by HCDA as well
get it straight HCDA is responsible for the infrastructure in that area…but you can still get him out of office
HCDA is just a proxy for Mayor to do his worst without his name being attached to it. All smokey back room deals!
HCDA is part of the state
Agree 100%. Unfortunately Gruber was right
Give Mufi the credit for this second big fail in Honolulu. Rail and now these condos.
Our elected officials must think that the Chinese are so dumb to pay an orbiting price for four walls in the sky?
Exorbitant.
For the big pay the Caldwell gets, he better have something to do with this.
The building is not close enough to Ward and Ala Moana to command the high prices.
So what does that say about all the future condos to be built near the other 20 stations that are not Ala Moana? Let this be the canary in the coal mine.
Just look at what happened in Las Vegas, unfinished steel skeletons and empty lots. Kakaako is being overbuilt!
Sunny exactly correct. It’s the end of a building cycle. Builders build until either the buyers or the lenders say, “Enough”!!!
Lack of sales? Duh…how many people on this island can afford that crap.
They weren’t trying to sell them to you and me. Think a lot further West.
Million dollar condo where my puppies have no room to roam around.
They can go to a Hostess Bar with you. Plenty still around.
The City can build another KPT for homeless on that site.
The top is in.
Oh, I don’t know. China is a big country. Wait until their stock markets improve and their currency re-values again.
Got to wait until the Republicans take care of Main Street before the economy improves.
To me this confirms the rumours that the high end condo market is saturated in Kakaako. The locals can’t afford all these $1 mil plus units it just doesn’t seem sustainable. With all these investors from China and the Chinese economy tanking I would not be suprised to see some fall out in the local real estate market. May be when they look back they will call it the Chinese bubble.
For those who were around, there was a brief period of time when interested buyers were Saudi’s that was short lived and then there was the influx of Japanese buyers and buying was chaotic. Japan buyers would walk up to someone washing their car in the drive way and make and handsome offer…brother-in-law had this happen and he simply declined…why? He had no mortgage, retired and his home was his “home”…priceless. Then where would he move to? So now it’s the Chinese and their economy is waffling a bit and are uncovering some rather fraudulent business practices and suspect growth numbers and expectations. We’ll see what happens in 2016 / 2017…it will be interesting.
The various permits should be pulled within the next year so that anyone else must either build a mid-priced condo or pay more to mitigate the inevitable impacts of traffic, sea level rise protections, etc.
Mediocre location for such high prices.
It is right across the street from the bankrupt 2nd rate Carbonesque UH Cancer Center and homeless shanti town that had been purged but repopulated. With spectacular neighbors like this how come outside investors are not plopping down a million plus dollars for matchbox condos?
GOOD!
Supply outpaced demand for this price range.
Tipping point, foreign investors pulling out or not as interested as their economy is faltering. Developers push it to the limit and try to squeeze everyone who will bite. No fish left.
also true. The boom is over…for now.
but MK Developer is different, very conservative, and very smart. This is why they are calling off the project. The old days of boom and bust developers are long gone.
O’ahu’s version of the Big Bang Theory.
Howard Hughes will cancel gateway project next. However, eventually these things will get built so get used to it. This project and gateway will have to wait until the next real-estate cycle which is typically 5-7 years. The plans are done, everything is ready to go. They will just dust them off and start over in a few years.
Yes, eventually we will be the New York City of the West with no ocean views and no sunshine in the condo building canyons. And they aren’t even making the sidewalks wider. Where are all these people going to walk? Oh, sorry, they will just get in their limousines. Pitiful.
Not to many can afford that kind of price. If people is going to pay that kind of a price for a condo they may as well go look for bigger property.
Park Lane is Puu Wai on steroids…
You can literally count the number of buses passing by Park Lane in your sleep. I much rather prefer a quiet place to live where I can hear my ears ringing.
No millionaires wants to spend that kind of money for condo overlooking homeless camps across the street.
Ding! Ding! Ding!
…kai. Black out Bingo winner.
Glad somebody brought it up…I was scrolling down looking for this…thanks!
Why not? You can also experience the scratch and sniff of the urine stench as the homeless fertilize the park, every morning when you open your window
Too many projects have been launched that are targeted at the top of the market. The developers need to turn their attention to building and pricing units for the less wealthy but still fairly affluent local buyers who are ready to trade their homes in the suburbs for condos in town. The demand is there.
With construction costs so high, it doesn’t pencil out. The reason there is so little affordable housing being built is because it is not affordable to build.
What happened to the former required affordable component or building if you build a high-priced condo?
Over saturation that was slated for the rich foreigners. Build something affordable for our local residents I’m tired of hearing the BS ads on the radio boasting affordable two bedroom condos in kakaako for $600,000! Give us a fricken break Stanford Carr and the rest of u greedy developers.
Agree on the BS ads. BTW isn’t that Kimo Kahoano on the ad talking about condos being less than the median price of homes on Oahu? Median price of $600,000 is for some land under your house, not 4 walls that are 300 feet off the ground!
That’s cheap but that unit is on the bottom floor. They aren’t really interested in building low or moderate housing affordable to local people.
This could be the start of an interesting chain of events. Aside from real estate slow down, General Growth Properties and their focus (gamble) on Ala Moana Shopping Center and banking on the influx of offshore walk in $$$ that may change. Personally, I rarely go to Ala Moana SC anymore, the only store that seems to want to cater to local business has been Macy’s…you’ll be surprise (as I was) when they assigned me a personal shopper and was treated with a lot of respect…local guy and no…I don’t have any personal interest in Macy’s Ala Moana. Give Macy’s a chance, I believe they are really trying to take care of the local clientele.
Great News !!
The same thing will happen wait Howard Huges. they will slow way down on those so called 20 buildings !!
Same ghost towns in China will also happen on O’ahu.
Like a sponge. it can only hold so much water. We are also seeing the same saturated market for high priced condos on O’ahu. The word is out for our Mayor to upgrade this third world living conditions if we want to see the demand again.
Chinese must be reading our SA comments about how run down O’ahu is?
Caldwell and Ige was hoping that the demand would have lasted until their first term was up.
Maybe too expensive for locals and americans. #kaaihue4mayor
Yep, O’ahu is also very expansive and crowded with concrete.
Hey you two goofball developers,even I as a mainland tourist know living in that area of homeless camps across street aint worth a dime to spend. And I bet the initial deposits were made by investors only,who planned to flip the condo for what they thought would be a profit.
So much for the construction crew bragging about the good times on O’ahu.
Thank you Jesus don’t need more condos
They should just lower the prices so locals can afford it.
While other cities and landowners build housing for sustainability, Hawaii, and the Bishop Estate, who should know better, plan luxury housing. Don’t the rich have enough already? What is wrong with Bishop Estate, speaking out of two sides of its mouth…sustainability in some areas and out of control development in Kaka`ako? Glad to see Vida fail. One down..
Location seems appropriate, however cracker-box size condos don’t reflect luxury. Thus there is an inordinate amount of discourse between price and posh accommodations. Moneyed individuals are accustomed to space. The model simply does not meet the test of being posh. It replicates just another ordinary cheap beach front condo alien to the rich and famous. Developers just had a poor marketing strategy hoping to target the emerging Johnny come later economic wealthy who depend on the stock market values in measuring their wealth. Thus, they do not represent the “old moneyed”.
agree…the area is just not very attractive or livable. Kiss off the projects that are being turned down. Homeless, sewage problems, dangerous high crime, governmental incompetence, stench, etc. will drive buyers out.
Yes, they will drive to the high-priced Japanese restaurants and soon Chinese restaurants, clogging the roads which are already over capacity. And interior roads should stop being used as freeways with no left turns. Cars have to be restricted to the freeways. Put up a lot of stop lights in the interior roads. Of course, they will naturally not be timed.
Their chasing out businesses and then discovering that Kakaako has been overbuilt. Good going Ige and HCDA.