Paradise Retirement Hawaii LLC has announced that they would like to build a 125 unit high-rise tower directly across from the Hawaii Convention Center at 508 Atkinson Drive. The project would be set up as a luxury continuing-care retirement complex for people who are 60 years or older. According to proposal, the $110 million plan would also call for the renovation of a 40 unit low-rise building next to the proposed tower at 1868 and 1880 Kahakai Drive. However, Paradise Retirement Hawaii LLC, does not have the capital to purchase the land below the proposed site, and is asking for a group of investors or potential unit buyers to step forward to help with the purchase.
According to their press release, Paradise Retirement would like to raise between $12 to $15 million from what they are calling their “VIP Founders Club”. These 20 founding investors or future residents would get a discount on unit prices and a two-week cruise to Tahiti. Units would have an entry fee of between $400,000 to $1.3 milion, and would be partially refundable when a resident moves out or dies. There would also be a monthly service fee of approximately $3,900.
Real estate experts are expressing a little bit of concern about this unusual method of raising capital. If the project were a condominium, the Hawaii Real Estate Commission would require certain disclosures from Paradise Retirement. However, a entry-fee based senior-living project is not regulated by the Hawaii Real Estate Commission, so no direct oversight would be in place.
Source: Honolulu Star Advertiser, 7-24-2012, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
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