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Kakaako Update: Waihonua Could Break Ground As Early As August 2012

I’m excited. As an almost new homeowner of Waihonua, I just put in my second deposit. Now, it’s final, or I lose my deposit. Scary for anyone to think, but exciting, because if you can get into this one at the bottom, there’s only more room to go up.

Our future home in Kakaako, it will be interesting to see it break ground in August! 

Paul Brewbaker, an awesome economist, spoke at our Realtor Central Regional Meeting, and he said, “You want to get in on the next Hokua.” What he means is, you want to be in the first new building, when the market has been beaten badly over so many times, and the developers don’t want to price their units too high, but high enough to make a profit. Waihonua is the next “it” building, in my humble opinion.

I ran into a friend the other day (who shall remain nameless) that works for one of the construction companies looking to bid on the project. This is a great sign, bidding has begun. There are four major construction companies that are in the mix, mostly because there are only four that are bonded for such a high amount.

What my friend said amazed me, only because I look at things from a buyer’s perspective, for myself and my clients. He said, “Caron, as a developer, you want to be the second, because the first is testing out the market, doesn’t know quite how to price it, then it takes off, and the second developer can ride the wave.”

Changing Kakaako's skyline, Waihonua is the final piece

Makes sense. I’m glad I’m one of the 175 closed and finalized contracts on Waihonua. There are currently 25 in the 30 day wait period. This is enough to get us started. Waihonua is on its way! Check out the analyst session, specifically on our dearest, Waihonua (Read the full article):

“… on slide 32, is our next project on Oahu, which is a Waihonua development. On this project, we did competitively bid to secure it. There were a number of issues on the site, archaeological, community opposition and what not that we are positioned well to negotiate with the community to solve those issues, and taking down the parcel of the very attractive rate, which equated to about $50,000 per unit and move the development process forward.

High-rise at Hawaii takes about four years from acquisition to sale. We’re almost two years into that process. We started pre-sales in December, had a very strong response, 200 non-binding contracts. We started converting these contracts to binding last month. As of today, we have 175 binding contracts and another 25 contracts in the binding process, which takes 30 days in Hawaii.

So we are very excited about the response on this. Typically, we see more like a 20% fall out during the binding process. Here we come through it at 100%, with 200 units under contract still [under those] binding.

With that, we’re in the bid process. As you can imagine, there’s not a lot of construction going on in Hawaii or the Mainland. It is very good bid time about to bid. We’ve got five locally based Hawaii contractors, some with Mainland ties, who would be bidding this project.

In June, we have those bids in. Hopefully, those are favorable with our sales, with our board and in tune and we’d actually look to move the construction of this project up to August depending on the pre-sales at that time and financing of the project.

The costs to build a high-rise in Hawaii can run for an upper end, not a high-end but upper end project for $5 to $600 foot and we target to sell those in the $700 per foot.

We do see a lot of competition on the horizon. There are number of entitled sites throughout Oahu market. We’re very active in that as Chris had mentioned, we do have an option for another site that we’re looking at and would like follow this project with that.

And just lastly on these projects now, obviously, Hawaii has the highest electricity rates, energy rates in the nation. We are very conscious of green development on this project, I mean, the chill water that cools the unit will also heat swimming pools, will heat the hot water, maintenance fees are very big issue when you come to high-rise development and the competition, so everything we can do to reduce those cost as – is as important as the price of the units.”

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