Small Net Increase in Occupied Retail Space in 2014

According to a report issued by Colliers International, a commercial real estate firm, 2014 saw a small net increase in the amount of retail space occupied by merchants.  The report stated that an additional 12,972 sq ft of retail space was filled last year, which reduced the vacancy rate from 4.2 percent to 4.1 percent. As points of comparison, since 2000, the highest rate was 8.5 percent (2003) and the lowest was 2.2 percent (2006). The average retail rate increased to $3.64 per sq ft, up from $3.35 per sq ft in 2013.  Colliers predicts that there is a strong likelihood that this will pass $4 per sq ft within the next 18 months.

Source: Honolulu Star Advertiser, 1-9-2015, www.staradvertiser.com
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Target to Hire 500 Workers in Hawaii

Target Corp. has announced that they will be hosting two job fairs in December to hire approximately 500 workers for the their two new locations in Kailua, Oahu, and Kahului, Maui.  The Kailua location will be located at 345 Hahani Street and will be approximately 134,000 sq ft in size.  The Kahului store will be about 140,000 sq ft in size and will be located in the Pu'unene Shopping Center.  Both stores will feature a pharmacy and a Starbucks and are expected to open in March 2015. 

Source: Honolulu Star Advertiser, 12-3-2014, www.staradvertiser.com
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ValueRock Realty Partners Purchases Hawaii Kai Towne Center

Kamehameha Schools has announced that they have sold the Hawaii Kai Towne Center to ValueRock Realty Partners.  The exact financial terms were not disclosed, but the Hawaii Kai Towne Center is the fourth-largest shopping center on the island and includes two suburban office buildings, a self-storage facility, and a retail shopping and dining center on a 30-acre lot.  L. Jack Wong, the CEO for Kamehameha Schools stated, "The transition of Hawaii Kai Towne Center from a fully owned Kamehameha Schools property to one where KS retains the land but sells its improvements strengthens our perpetual endowment in support of our educational mission."

David Lee, the founder and chairman of ValueRock, added, "Over the years, ValueRock Realty Partners has been engaged in ownership and management of key Hawaii properties, We are pleased to have the opportunity to expand our presence here by adding Hawaii Kai Towne Center, a quality, mixed-use asset, to our portfolio."

Source: Honolulu Star Advertiser, 11-27-2014, www.staradvertiser.com
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Foodland to Close Its Ala Moana Center Location

Foodland Super Market Ltd. has announced that they will be closing their Ala Moana Center location after 55 years of serving that neighborhood.  Officials with the company cited higher rents as the reason why they would not be renewing their lease, but has promised to find all of the store's employees positions at other Foodland locations on Oahu.  Jenai Wall, the chairwoman and CEO of Foodland, stated, "Our company has operated a store at Ala Moana since statehood so the decision to leave the center after all these years was not an easy one, especially because of the impact the closing will have on our loyal employees and customers. Yet, while it truly saddens us to say 'goodbye' to Ala Moana, the challenges and costs of operating a store in this location today made it impossible for us to justify staying."

Francis Cofran, the general manager of Ala Moana Center, commented, "Ala Moana Center has enjoyed its long relationship with Foodland. As one of the original tenants that opened in 1959 with Ala Moana Center, Foodland will always remain a special part of the center's history. We appreciate the 55 years of partnership we have shared with Foodland and its employees and wish the company continued success serving Hawaii."

Source: Honolulu Star Advertiser, 11-6-2014, www.staradvertiser.com
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Longs Drugs to Open First Location in Waikiki

Longs Drugs has announced that we will opening their very first Waikiki location at the Bank of Hawaii Waikiki Center, where the former Teddy Bear World store was located.  The tentative plan is complete the two-story, 20,000 sq ft location by the end of 2015.  Waikiki currently has only two pharmacies, though there are many ABC Stores and Lawson convenience stores that sell over-the-counter medications.  Rick Egged, the president of the Waikiki Improvement Association, commented, "We think it's a great idea. I've actually wanted one in Waikiki for a long time. It's a great addition to Waikiki because it'll provide services that will be much in demand, both from the standpoint of our visitors and even our residents and people who work in Waikiki."

Source: Honolulu Star Advertiser, 10-9-2014, www.staradvertiser.com
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Big City Diner Coming to Windward Mall In Spring of 2015

A new Big City Diner restaurant is coming to Windward Mall in Kaneohe in the spring of 2015.  The locally owned and operated restaurant chain currently has locations in Kaimuki, Kailua, Ward Centers, Waipio and Pearlridge and serves what they describe as Asian-American comfort food. Land Muraoka, the owner and president of Big City Diner stated that they are currently working on plans to convert the 5,411 sq ft space in Windward Mall and will soon be hiring employees for this location. The Windward Mall restaurant will be open for breakfast, lunch, dinner, and late-night dining.

Richard Chang, the general manager for Windward Mall, stated, "With their awesome selection of local options and warm customer service, Big City Diner will bring an exciting new flavor to Windward Mall. We are thrilled to continue to expand our options for shoppers, which in addition to Big City Diner includes new seasonal kiosks and shops like Hali Hali Rides and See's Candies."

Source: Honolulu Star Advertiser, 9-6-2014, www.staradvertiser.com
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Nighttime Construction Approved for Ala Moana Center

The Hawaiian Dredging Construction Company has received a noise variance from the state of Hawaii to allow for some nighttime construction to begin at the Ala Moana Center. Their application stated that allowing night work would be in the public's interest, given the positive economic impact generated by the shopping mall.  The application stated, "The project will add more retail space and commensurate parking space to the most popular shopping attraction in the state of Hawaii, thus contributing to and sustaining and enhancing the local economy." When completed, the expansion on the mall's Ewa end will add an additional 650,000 sq ft of new retail space. The $572 million expansion project broke ground about a year ago and is expected to be completed by 2015.

However, residents living in 1350 Ala Moana and Uraku Towers, which both face the construction site, are very unhappy with the state's decision and had hoped that work could be completed during normal daylight hours., which is right across Piikoi Street from the mall, are very unhappy with the news.  Kaethe Kauffman, who resides in Uraku, stated, "It is unethical for their aggressive business plan to be done at the expense of significant physical suffering of nearby residents, which will happen with all-night work."

Source: Honolulu Star Advertiser, 8-2-2014, www.staradvertiser.com
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Royal Hawaiian Center Sold for $696.5 Million Leasehold

According to the Hawaii Information Service, the Royal Hawaiian Center has been purchased from J.P. Morgan Asset Management from Kamehameha Schools for $696.5 million Leasehold.  The sale included all of the mall buildings, but did not convey the underlying lands.  Kamehameha Schools has stated that they will not disclose the length of the lease, but it is generally speculated by real estate professionals that the lease will be for approximately 60 years.

Proceeds from the sale of the Royal Hawaiian Center will be reinvested to support Kamehameha School's operations.  The center was Kamehameha School's biggest single asset and the school decided to sell the property as a way of diversifying its roughly $9 billion investment portfolio.  Kamehameha Schools has announced that they would also be willing to sell the Hawaii Kai Towne Center and Windward Mall in Kaneohe in a similar leasehold sales transaction.  The value of these two properties combined is estimated at between $275 to $400 million Leasehold.

Source: Honolulu Star Advertiser, 7-30-2014, www.staradvertiser.com
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Hennes & Mauritz to Open Stores in Kapolei and Ala Moana

Hennes & Mauritz, also known as H&M, has announced that they will be building a second Hawaii location in Ka Makana Alii, the new regional mall in Kapolei, as would eventually like to build a third location in Ala Moana Center.  Ka Makana Alii is scheduled to open its first phase in 2016 and developer DeBartolo Development is excited to have H&M as one of their anchor tenants. Edward Kobel, the president and COO for DeBartolo stated, "H&M will provide easy access to contemporary fashion for area families, who will enjoy the convenience of having such a sought-after brand just minutes away."

H&M's first Hawaii location was built in the Waikiki Business Plaza earlier this year.  The store is reportedly doing very well.

Source: Honolulu Star Advertiser, 7-30-2014, www.staradvertiser.com
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New Walgreens to Open in February 2015 on Keeaumoku Street in Ala Moana

Walgreens has announced that they will be opening a new store on Keeamoku Street in February 2015, but it is slated to be unlike any drugstore that Hawaii has ever seen. According to company spokesmen, this location will be a "Well Experience" flagship store which will have everything from fresh handmade sushi, poke bowls, bentos, a coffee and pastry counter, a juice bar, and self-serve frozen yogurt.   Gregory Wasson, Walgreen's president and CEO stated, "We are stepping out of the traditional drugstore format and creating something unique, new and special."

The new store will be just over 20,000 sq ft in size and will include a LOOK Boutique cosmetics department offering manicures.  The two story building has an additional three levels of parking over it and was designed to support a 20-story residential tower above that.

Source: Honolulu Star Advertiser, 7-17-2014, www.staradvertiser.com
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Regal Entertainment Group to Open 12-Screen Movie Theater at Kapolei Commons

The Regal Entertainment Group has announced that they will be opening a 12-screen theater at Kapolei Commons. According to their announcement, the 52,000 sq ft theater should open next year and will feature electric reclining seats and upgraded menu options.  Jerry Grewe, the vice president of real estate for Regal Entertainment Group, stated, "Regal is thrilled to be adding another fantastic entertainment option for our loyal customers on the island of Oahu. Regal Kapolei Stadium 12 will feature a new level of amenities for moviegoing." Regal currently operates nine cinemas in Hawaii and about 570 throughout the U.S.

Source: Honolulu Star Advertiser, 7-11-2014, www.staradvertiser.com
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Wal-Mart To Open Downtown Honolulu Location on Wednesday, July 9, 2014

Wal-Mart has announced that they will be opening its new downtown Honolulu location at Fort Street Mall on Wednesday, July 9, 2014.  There will be a Hawaiian blessing and maile lei ceremony from 7:30 AM until 8:00 AM.  The store will be open for business immediately after the ceremony.  The store will remain open daily from 6:00 AM until 10:00 PM. According to Wal-Mart spokesman David Sayre, the downtown Honolulu location will be approximately 80,000 sq ft in size.  The company has hired approximately 150 workers in the past few months for this store.

Source: Honolulu Star Advertiser, 7-4-2014, www.staradvertiser.com
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Update on The Waikiki Landing

The Waikiki Landing is a partnership between the state of Hawaii and Honey Bee USA INC. to redevelop the Ala Wai Small Boat Harbor.  However, Honey Bee has just announced that they have lost their major funder for the project, leaving them searching for a new source of financing to meet their contractual obligations with the state. Honey Bee is currently working with four different groups to secure $24 million of funding, and hopes to do so by the middle of this month.  Honey Bee has been paying the state approximately $37,000 per month in land and water rent since January 2014.  However, since they were unable to secure financing, they have missed their June deadline when rent increased to above $70,000 per month.When completed, The Waikiki Landing should have a new boat repair facility and fuel dock combined with restaurants, entertainment venues, wedding chapels and space for the U.S. National Kayak Team.

Debo­rah Ward, the spokeswoman for the Department of Land and Natural Resources stated that they would like to work with Honey Bee to make this project happen, but if Honey Bee is unable to comply with the terms, the lease could be terminated and a new proposal could take its place.  Ward stated, "If another (request for proposal) were to be issued, actual development could occur in a much shorter time period since the land use entitlements and approvals have already been obtained, the property has been cleared and graded, environmental issues have been addressed, foundation testing has been done and the parcels have been legally subdivided." Ward noted that Honey Bee has already paid the state more than $865,000 in rent and development fees and has cleared the property, removed contaminated soiled, razed a dilapidated boatyard building, secured various land use entitlements and approvals, and obtained city permits. Ward added, "All of this was done at Honey Bee's expense and at no cost to DLNR, the state, or the taxpayers."

Jeff Merz, a member of the Waikiki Neighborhood Board commented, "People hated the project at first, but they made changes and once the company started clearing land, the community seemed to accept it. The area is run-down and there's been crime. People understood that we needed something to energize the location. Now to be told that it could stay a big empty construction site for a longer period, the community won't like that."

Source: Honolulu Star Advertiser, 7-2-2014, www.staradvertiser.com
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Polynesian Cultural Center Plans to Build Outdoor Marketplace

The  Polynesian Cultural Center has announced that they plan to build a 119,000 sq ft marketplace in front of their main attraction with free admission and free parking with validation. The Hukilau Marketplace is scheduled to open in January 2015 and will offer retail, dining and entertainment to patrons who decide not to enter the main park.  Alfred Grace, the president and CEO of the Polynesian Cultural Center, stated, "This is a really huge undertaking for the Polynesian Cultural Center. It really is the first time that we have reached out to the public with an offering that does not require an admission ticket and that will provide guests with a short-term experience at the Polynesian Cultural Center. Everything prior to that has been based on guests, visitors and locals alike, spending a full day at the Polynesian Cultural Center. So for the people driving around the island or looking for something to do for a couple of hours, this is an entirely new offering."

The marketplace will be open from 10 a.m. to 10 p.m. Monday through Saturday and will have several restaurants, a bakery, foot trucks, a high-end Hawaiian jewelry store, an ukulele shop, and other retail stores and kiosks.  Grace added, "We think that there's some great opportunities falling into place for the Polynesian Cultural Center and this community to be more self-sustaining. We haven't really ever been able to take advantage of the drive-by traffic that we have on Kamehameha Highway. With the marketplace and the (new) hotels (being built), the growth rates at the PCC actually will increase going forward rather than diminish as they have in recent years. We are confident we will see a reasonable return on our investment from this marketplace based on all the projections that we've done and the projections that Colliers Hawaii did. They also did an analysis of drive-by traffic and people who would stop and go to the PCC. We used some fairly conservative estimates to come up with some initial return on investment forecasts."

Source: Honolulu Star Advertiser, 6-22-2014, www.staradvertiser.com
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Aloha Tower Marketplace Has Ceremonial Groundbreaking Ceremony

A ceremonial groundbreaking ceremony was held at the Aloha Tower Market Place, signifying the start of Hawaii Pacific University's $40 million renovation plan for the struggling retail complex at Honolulu Harbor.  HPU plans to build a dormitory facility for 300 students, additional classrooms, a college bookstore, as well as additional restaurants and retailers.  The school anticipates that all of the construction work will be completed in 2015 to coincide with the university's 50th anniversary.  Geoffrey Bannister, HPU President, stated, "We are really on the way to revitalizing this area. Hawai'i Pacific University is invested in strengthening the Hawaii community, providing an exceptional educational experience for our students, and bringing new life and vitality to this much-beloved landmark."

It is projected that this renovation project will create 200 construction jobs and between 200 and 250 permanent jobs once completed.  Governor Neil Abercrombie stated, "I know this is the beginning of a spectacular rise not only in the educational offerings but in the revitalization of the entire urban core of Honolulu."  Honolulu Mayor Kirk Caldwell added, "Shortly there's going to be new life here. I see nothing but good in all of this."

Source: Honolulu Star Advertiser, 6-19-2014, www.staradvertiser.com
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Royal Hawaiian Center Sold to J.P. Morgan Asset Management

J.P. Morgan Asset Management has announced that they have purchased the Royal Hawaiian Center in Waikiki from Kamehameha Schools.  While the exact sale amount or terms have not been disclosed, it is generally believed that the price in excess of $500 million.  The only thing that is known is that the purchase is for the Leasehold interest of the land for 60 years and Fee will be retained by Kamehameha Schools.  After that 60 year period, Kamehameha Schools would recover complete ownership of the property.

Chris Graham, the managing director of J.P. Morgan Asset Management, stated, "Kamehameha Schools has created, maintained and continually enhanced the world-class shopping and community destination. We are excited to continue Kamehameha Schools' responsible stewardship of this important local asset, its enthusiastic promotion of Hawaiian culture, and its enriching community programs."

Source: Honolulu Star Advertiser, 6-7-2014, www.staradvertiser.com
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Ka Makana Alii Mall Update

DeBartolo Development LLC, the developer for the Ka Makana Alii Mall which is being built in Kapolei, has announced that they have signed Macy's to be one of their anchor tenants. The $500 million Ka Makana Alii project will have over 100 shopping, dinning and entertainment-related tenants as well as two hotels and office space when completed. Edward Kobel, the President and COO of DeBartolo Development, stated, "Demand for leasing space at Ka Makana Alii has been overwhelming with over 80 percent of space either in lease or active negotiations. We are confident that the addition of Macy's will only heighten interest from local and national retailers.

Source: Honolulu Star Advertiser, 5-30-2014, www.staradvertiser.com
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Whole Foods Market Coming to Ward Village in Kakaako in 2017

Whole Foods Market has announced that they will be opening up a grocery store in the Ward Village redevelopment in Kakaako.  According to Whole Foods, they will be demolishing the former Nordstrom Rack, the existing Office Depot and the surrounding surface parking lot to build a 50,000 sq ft store at the corner of Queen Street and Kamalee Street.  A parking garage with 500 stalls will be built above the store. This newest location will be the largest Whole Foods in the state of Hawaii and will become its flagship location.  Claire Sullivan, who is in charge of coordinating, purchasing and public affairs for Whole Foods' Hawaii, stated, "It's a fantastic site.  We've been really interested in having a Whole Foods in the Kakaako area. It's a vibrant area. We think we'll be well received there."

Nick Vanderboom, the Senior Vice President for Development for Howard Hughes Corp which owns and operates Ward Village commented, "The whole block will be redeveloped.  We'll be putting in a road on the Ewa side of the block and a road between Ward Entertainment and the redeveloped project. By adding roads, we'll be providing improved access to not only the mixed-use project, but Ward Entertainment Center and future projects in Ward Village." Howard Hughes Corp owns the entire 60-acre Ward Village and plans to build 22 residential towers with as many as 4,300 residential units.

Stephany Sofos, a local retail analyst, stated, "This Kakaako development is going to be a city within a city. And where do people go when they're in a city? It's to the grocery store to get food. This is over an acre of land, and it's going to have a restaurant, a deli and a bar, so it's actually going to become the center of socializing as well as buying your groceries in a safe, convenient atmosphere.  You're going to have an awful lot of residential and commercial bodies running around the area, and this is perfect for the area. I think Whole Foods will do extremely well in that location."

Source: Honolulu Star Advertiser, 5-7-2014, www.staradvertiser.com
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Outlets of Maui to Expand by 50,000 Sq Ft

Watt Cos, the real estate investment firm that owns the Outlets of Maui, has announced that they will be adding a total of 50,000 sq ft of retail space to their property.  Currently, there are 147,000 sq ft of retail space at the Outlets of Maui, out of which 91 percent of that space is occupied by tenants.  Nadine Watt, the president of Watt Cos, stated, "The redevelopment of The Outlets of Maui has created a great and productive use for the center while bringing new jobs and terrific new retailers to the region's residents and visitors." 

Source: Honolulu Star Advertiser, 5-6-2014, www.staradvertiser.com
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Target to Open Kailua Store in March 2015

According to a press release by Target Corp., they will be opening their Kailua store in March 2015.  Target had planned to open the store this October, but construction was delayed when an archaeological study discovered iwi kupuna, or Native Hawaiian skeletal remains, on the site.  When completed, the Kailua Target will have a total of 134,000 sq ft of interior space and will provide jobs to approximately 300 workers.

Source: Honolulu Star Advertiser, 4-3-2014, www.staradvertiser.com
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