The developer of a planned twin-tower condominium project near Ala Moana Center is preparing to sell units after holding off last year because of COVID-19.
A company formed by the owner of local construction firm Nan Inc. intends to open a sales office for the 972-unit project, called The Park on Keeaumoku, in March.
The sales effort will show to what degree buyer demand exists for new, largely moderate-price high-rise homes in Honolulu amid the coronavirus pandemic.
That test will be a big one, given that Park on Keeaumoku would be the second-biggest residential condo tower project ever developed in Hawaii.
“It’s a huge risk to build that many units,” said local housing market researcher Ricky Cassiday.
Cassiday said Hawaii doesn’t have a bad housing market at the moment and that Park on Keeaumoku should do well if buyers perceive good value in the project and believe in the developer.
“It might be the right time,” he said.
Nan Shin, previously known as Patrick Shin, the owner of Nan Inc., who formed Keeaumoku Development LLC to take on the tower project in 2019 from another developer, said his focus is on kamaaina.
“This product is for the local people,” he said.
Shin has yet to finalize unit prices with project broker Coldwell Banker but said prices should be around $1,000 a square foot of living area.
So for a two-bedroom unit with 920 square feet of living space, the price would be around $900,000 plus or minus a little depending on the floor level of the unit. Park on Keeaumoku is designed to feature studios up to three-bedroom units.
Shin said units generally should cost about 20% less than two nearby towers under construction, Azure Ala Moana and Sky Ala Moana.
Azure, which is on pace for completion this fall, began sales in 2018 starting at around $550,000 for a 504-square-foot studio up to at least $2.2 million for the priciest units.
Recently, 38 of Azure’s 330 units were still available and priced from $860,925 for an 880-square-foot unit to $1.1 million for a 1,042-square-foot unit.
At Sky, 390 market-priced units went on sale in 2019 from $568,800 to $873,800 for one-bedroom units with 519 to 574 square feet of living space, and from $785,300 to $1.3 million for two- bedroom units with 801 to 901 square feet.
Recently, 61 Sky units remained available for $676,100 to $1 million.
There is also a third nearby condo tower being built in the area. This one, The Central Ala Moana, began sales in 2018 and is almost complete. All 512 units are sold out. Units in The Central included 202 market-priced condos from $580,000 to $1.4 million and 310 units that sold for $286,000 to $708,000 under a state affordable-housing program at discounted, subsidized prices with some buyer restrictions.
Park on Keeaumoku was initially planned in 2018 by Cuzco Development U.S.A. LLC, an affiliate of a South Korean company that owned the 3.5-acre site occupied by a cluster of retail buildings bounded by Keeaumoku, Liona and Rycroft streets, two blocks makai of South King Street.
Shin bought the property in 2019 for $47.5 million, according to property records, and obtained city approvals that allowed the project to be taller and denser in return for a bigger component of affordable housing and a roughly half-acre public park on the site.
Park on Keeaumoku represents Hawaii’s second-biggest residential condo tower after 801 South St. in Kakaako, with 1,045 units in two towers.
Shin founded Nan Inc. 31 years ago and the firm has expanded to build everything from government buildings to rail stations and a wastewater treatment plant. He said he long wanted to follow one of his idols, local contractor Bert A. Kobayashi Sr., branching into high-rise construction, but never got the chance before.
“I always wanted to get into high-rise construction, but nobody gave me the job and opportunity,” Shin said.
Shin is now the developer of an estimated $600 million tower project.
Sales for Park on Keeaumoku were previously slated to begin last summer but were put on hold because of COVID-19.
“There is no crystal ball, so it was definitely a struggle to figure out how do we deal with this,” said Wyeth Matsubara, Keeaumoku Development chief operating officer.
Matsubara said the decision was made to go ahead now in part because interest rates are near historic lows and many people have saved money by spending less while Oahu’s housing market has remained resilient, with record resale prices last year for single-family homes and condos.
Condo resale volume last year dropped 13% but notched a 20% gain in December over the same month the year before.
“The condo market did see a slight drop here and there, but it’s still fairly strong,” Matsubara said. “It hasn’t dropped to a point where it mirrors other past economic downturns.”
If sales go well, construction could begin near the end of this year on both towers.
The developer also has an option to build one tower, an adjacent 12-story parking garage topped by a pool and other amenities for residents along with connected commercial space for retail and restaurants as a first phase, followed by the second tower later if not enough units are sold initially.