It was designed with fantastic amenities, amazing ocean views and a name that means “life.” But a planned $500 million luxury condominium in Kakaako was killed by its developer Friday after weak sales.
The move to cancel the project called Vida at 888 Ala Moana was made in the midst of a tight housing market on Oahu where buyer demand is generally outstripping supply for primary housing. Vida, however, targeted the market’s upper reaches where tough competition exists among several developers trying to sell multimillion-dollar condos in Kakaako.
Kobayashi Group and The MacNaughton Group, local real estate development firms that formed MKVida LLC to produce Vida, said their decision was in response to a slow pace of buyer interest that showed no signs of picking up.
“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.
“What this is, is a sign that demand for high-end condos in Kakaako is limited,” said Ricky Cassiday, a local housing market analyst. “There’s no inexhaustible demand at that price range.”
Cassiday said pulling the plug on such a big project where tons of money had been spent in permitting, design and sales was a serious move.
Vida had more of a challenge than some projects given its site, which borders a car dealership, a low-rise office building and a closed-off street fronting a line of warehouses.
The development firms said about 105 buyers — mainly local residents — signed sales contracts, representing about 40 percent of the 262-unit project where unit prices ranged from $988,000 to $8.5 million.
Nearly all the sales volume for Vida occurred soon after sales began nine months ago in May, when officials with Heyer &Associates LLC, the project’s exclusive broker, reported that buyers snapped up about 90 units in the first four days of sales after an initial 129 units were released for purchase.
With no significant continued sales momentum, the development team said they wouldn’t be able to start construction and deliver homes to buyers in a timely manner.
Typically, high-rise condo developers need to sell 60 percent to 65 percent of units in a building before lenders will release money to start construction.
Vida’s development team in May projected that construction would start sometime between October and December with completion in early 2018.
BJ Kobayashi, a Kobayashi Group principal, said sales contract terms permitted the development team six years to finish the tower but that it wouldn’t have been fair to buyers who were planning to live in the building and had made deposits representing 20 percent of their purchase price.
The development team informed buyers of Vida’s cancellation Friday, and said they will receive full refunds pending arrangements to have escrow fees waived.
Unlike Vida, buyer demand for luxury condos that Kobayashi Group and MacNaughton Group are developing at Ala Moana Center, has been strong in recent months, he said. That project, Park Lane Ala Moana, is 75 percent sold, representing 160 sales in the 215-unit midrise. Park Lane unit prices range from $1.2 million to $28 million.
Howard Hughes Corp., a rival developer with two condo towers under construction and two more slated to start soon, has been selling units in a fifth tower that it says will set a new price peak well over $20 million in Ward Village, its master-planned neighborhood. However, Hughes Corp. has declined to publicly share prices or sales results for this 125-unit Gateway tower, where sales began in July.
Vida was hailed as heralding a new generation of luxury high-rise living in Honolulu. The tower was designed with an outdoor movie theater with a headset sound system, an indoor theater, a wine-tasting room, a putting green, two pools, a private dining room, a community garden, a craft room, a game room, a workshop with tools, a whole floor of storage and workspace units, four guest apartments, a gym with a connected children’s play area, and a fleet of bicycles and surfboards.
One unique feature was the absence of hallways. The 39-story building was going to have six elevators to service eight units per floor, with each dual-door elevator providing exclusive access to individual condo entryways.
The 888 in Vida’s name was selected to reflect good luck associated with the No. 8 in Chinese culture.
The property, 3.4 acres on the mauka side of Ala Moana Boulevard bordering Koula Street and a closed-off portion of Auahi Street, is owned by Kamehameha Schools and had been occupied by Cutter automobile dealerships that were relocated to make way for the tower.
Kamehameha Schools said in a statement that it respects and supports the decision by the MacNaughton and Kobayashi firms.
“They have been strong supporters of the revitalization of Kakaako, and they are valued development partners,” the trust said. “We look forward to continuing our long, successful relationship with these firms and their principals.”
