First Hawaiian Bank Reaches $10 Billion in Loans

First Hawaiian Bank has announced that they have reached $10 billion in loans for the first time in their company's history, and attribute this to a growing level of consumer confidence and a resurgence in the construction industry. Bob Harrison, the chairman, president and CEO of First Hawaiian, stated, "We're seeing good growth in the lending portfolio, which leads to growth in net interest income. We also saw good expense control, as we have had throughout the year, and we had gains from securities sales (in the bank's investment portfolio)."

Deposits have also grown over the last 12 months to $14.7 billion from $13.6 billion.  Harrison commented, "Deposits are really a reflection of the bank's relationship strategy as we continue to grow and the economy continues to improve here. That's how deposits grow. It's been unusually high, even we're a little surprised at how high the deposit growth has been going. We're seeing that on the consumer side in terms of borrowing and deposit growth. It also has been strong in the construction portfolio. Clearly, we're seeing growth in our construction loans and, secondly, with those people in the construction industry that are working, you're seeing growth and confidence in their own personal lives. Those are generally well-paying jobs."

Source: Honolulu Star Advertiser, 1-23-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Update on Artspace in Kakaako

The Hawaii Community Development Authority has voted 6-0 in favor of issuing the non-profit Artspace to build an eight story building in Kakaako.  Under Artspace's proposal, their building will feature a total of 84 rental lofts that will serve as housing for artists.  Monthly rents will range from $437 to $1,334 per month and will target those households earning between 30 percent to 60 percent of Honolulu's median income ($20,150 for a single person or $40,260 for a family of four on the low end).  "Art" for the Artspace project is defined broadly and can include literature, photography, architecture, singing, dancing, film-making and acting.  Even technicians, administrators and teachers who support art can qualify.  The quality of the art produced will not be a factor in deciding occupancy.  The building should be finished by the end of 2016.

Source: Honolulu Star Advertiser, 1-22-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Hawaii Experiencing a Shortage of Doctors

According to a report issued by the University of Hawaii John A. Burns School of Medicine's Area Health Education Center, Hawaii currently has a shortage of 890 doctors. Furthermore, with almost one-third of the state's doctors reaching retirement age within the next five years, this shortage is expected to increase to as high as 1,500 doctors by 2020.  Things are particularly bad on the neighbor islands, which seems to have a harder time attracting physicians then Oahu.

If someone were to look at the Hawaii medical want ads, things do not appear so bad as there are fewer then 40 positions currently open at larger hospital or medical providers. This is because traditionally a high percentage of physicians would open their own primary care practices in their neighborhoods.  However, many new graduates today prefer not to have the stress and headache of running their own business and prefer to obtain a "job" at a large hospital.  Large hospitals are simply not hiring enough new doctors to fill the needs of the Hawaiian islands.

Source: Honolulu Star Advertiser, 1-20-2015, www.staradvertiser.com
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Credit and Debit Card Spending Increases by 7.4 Percent During Fourth Quarter of 2014

According to a report issued by First Hawaiian Bank, credit and debit card sales increased by 7.4 percent during the fourth quarter of 2014. This amounts to $763.8 million as compared to the $711 million in the same quarter a year prior.  Bob Harrison, the chairman, president and CEO of First Hawaiian Bank, stated, "The economy continues to grow. Lower energy costs will continue to help the customer because they'll be spending less on electricity. That will give them more disposable income, which will be good for the rest of the economy. This report is a really good reflection of consumer confidence. Construction employment has gone up, and a lot of projects are going up in Honolulu. We see further strength in 2015. For the Japanese visitor, the yen has weakened considerably over the last 12 months, but they're still coming to Hawaii. We're still optimistic for another strong year. I think the strong economy will certainly help the mainland visitors to Hawaii as well." First Hawaiian is the largest bank in Hawaii with $18.1 billion in assets.

Source: Honolulu Star Advertiser, 1-18-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Film and Television Industry Spent $223 Million in Hawaii in 2014

According to Donne Dawson, the Hawaii Film Commissioner, the film and television industry spent a total of $223 million in productions in 2014.  This is a slight decrease from the $228 million that was spent in 2013 or the $245.6 million that was spent in 2012.  Dawson commented, "I don't think there's a way to explain (the drop), really.  We did have a project that was slated for 2014 that pushed to 2015. If it hadn't, the figure would have been significantly higher. These things happen for a variety of reasons. It's the nature of the industry."  Dawson added that she does not anticipate much growth in spending in 2015.

Source: Honolulu Star Advertiser, 1-18-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Waikiki Commercial Properties May Pay Special Tax to Maintain Waikiki Beach

The Honolulu City Council is being presented with bills that would allow the Waikiki district to tax the owners of all commercial properties in Waikiki an additional 7.63 cents per $1,000 of assessed value.  By levying this tax, the Waikiki district hopes to collect approximately $600,000 a year from these commercial properties to help maintain the sand on Waikiki Beach.  The balance of the $1.3 million that it costs to retain sand on Waikiki Beach will be paid for by the state Department of Land and Natural Resources.  According to the DLNR, the beach is eroding at a rate of about one foot per year.  The beach will be need to be replenished every five to ten years to keep up with this loss.

Commercial property owners in Waikiki already pay between 12.5 cents to 50 cents per $1,000 of assessed value into the Waikiki Business Improvement Fund.  This is in addition to their regular property tax bill.  The Waikiki Business Improvement Fund pays for the streetscape maintenance, the "aloha ambassadors" in Waikiki, and overtime hours for the Honolulu Police Department officers.

Source: Honolulu Star Advertiser, 1-18-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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University of Hawaii's Cancer Center Will Run Out of Funding in Two Years

The Cancer Center, a research unit of the University of Hawaii at Manoa, will run out of funding in just two years, leaving lawmakers furious at the lack of oversight by the University.  Last year, the Cancer Center ended the year with nearly a $10 million budget deficit and was required to tap into its financial reserves in order to stay afloat.  David Lassner, the university president, admitted to the state House Finance and Senate Ways and Means committees that the university isn't sure what will happen if the reserves are depleted.  Lassner stated, "It is not clear — without support from some source, that Hawaii can maintain a (National Cancer Institute-designated) cancer center."

With declining cigarette tax revenues that pay for cancer research, and the fact that the center's Kakaako facility costs $8 million a year in mortgage payments, has left the Cancer Center in huge financial problems.  Senator Jill Tokuda, the Ways and Means chairwoman, commented, "I think we're in a very serious situation, probably more serious than you realize. Yes, we have a very significant obligation to the health and wellness of the people of the state. But we have a fiduciary responsibility to the state as well. The Legislature is going to want to make sure that we see some sort of very solid and detailed business plan."

Source: Honolulu Star Advertiser, 1-16-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Update on the Honolulu Rail Project

The Honolulu Authority for Rapid Transportation, which oversees the rail project, is requesting that the Honolulu City Council allow them to borrow hundreds of millions of dollars in bonds leveraged against the city's general fund to help pay for the project.  While this had always been a part of the financial plan to build the rail project, recent news that the project faces a $500 million to $700 million budget shortfall has left City Council members uneasy if the rail project will ever be able to pay them back. Ann Kobayashi, the city Budget Chairwoman, stated, "I've been told so many things, and many of them untrue, and there's been so many changes so I just want to make sure. We're asking every taxpayer in our city and county to be co-signers of this loan."

Rail official have been reluctant to provide even a general estimate or range of how much they think the project will need to borrow over the total course of construction. Councilman Ron Menor questioned, "When can we get more specific information? What assurances or safeguards are there that the city would not eventually be put in a situation in which real property tax revenues are required to pay back the loans instead?"

The City Council plans to delay any decisions until at least February.

Source: Honolulu Star Advertiser, 1-15-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Institute of Human Services Show Initial Success with Outreach Program in Waikiki

The Institute of Human Services announced that they have experienced initial success with their full-time homeless outreach program in Waikiki, and have already helped 63 homeless people into shelter or housing since they started in November 3, 2014. The program is funded through a joint effort by the city's Housing First program as well as financial support from the Hawaii Lodging and Tourism Association. Connie Mitchel, the executive director of IHS, stated that the program hopes to serve 300 homeless people during its first year. As a point of reference, during the 2014 Statewide Homeless Point-in-Time Count, it was recorded that there were 541 homeless people in Waikiki in January 2014, but IHS believes that the actual number is slightly higher.

The Hilton Hawaiian Village plans to host a fundraising concert at the end of April to raise at least $1 million for the Institute of Human Services to continue its work to reduce the homeless population in Waikiki. Jerry Gibson, the area vice president for Hilton Hawaii, commented, "We want the community to line up behind us for IHS so that we can put a real big effort into giving them as much as we can so that they can have the tools to do their job to end homelessness." Honolulu Mayor Kirk Caldwell stated, "What's taking place in Waikiki is a testament to what can happen when the public, private and nonprofit sectors work together, and we hope to continue this collaborative approach."

Rick Egged, the president of the Wai­kiki Improvement Association, added, "Frankly, I agree with those that say the problem is not solved, but I believe that they've made fantastic progress. The fact that we are on the right track shows that we can get results with the money that's been raised. The outreach and services that are happening now weren't available a year ago."

Source: Honolulu Star Advertiser, 1-14-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Matson Decreases Fuel Surcharge

Matson Inc. has announced that it will reduce its fuel surcharge from 35.5 percent to 31.5 percent due to the fact that fuel prices have continued to drop. The most recent reduction will go into effect on January 18, 2015, a little less than a month from the last price reduction of 2 percentage points on December 21, 2014. Dave Hopes, Matson's senior vice president for ocean services, stated, "We are pleased to be able to make another downward adjustment to our fuel surcharge, which for most customers represents a reduction in shipping costs ranging from $80 to $140 per container. With this latest reduction, our fuel surcharge for those services will have dropped 11 percentage points since Nov. 2. We continue to be encouraged by the recent moderation in bunker fuel prices and remain focused on diligently exploring ways in which we can maximize fuel efficiency for our fleet."

Source: Honolulu Star Advertiser, 1-13-2015, www.staradvertiser.com
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Marketing Effort Made to Attract High-Spending Chinese Golfers to Hawaii

The Hawaii Tourism Authority and Pacific Links Hawaii have announced that they are working together to attempt to attract more high-spending Chinese golfers to the Hawaiian Islands. Micah Kane, the chief operating officer of Pacific Links Hawaii commented, "Year-to-date, we've hosted about 2,500 rounds of golf for Chinese members. Ideally, we'd like to see the partnership grow so that we can host 200 to 300 Chinese players monthly." Chinese golfers that come to Hawaii spend more than $550 per day in hotel stays, activities, and travel expenses.

David Uchiyama, the vice president of brand management for HTA, added, "We've partnered with Hyundai to develop the Korean golf market and with Sony to develop Japan, but this is the first time that we've participated in a public-private partnership to bring more Chinese golfers to Hawaii. In general we are doing very, very well in China, and we'll continue to improve our numbers. Golf is becoming a mainstream sport in China. If we can create enough demand, we'll get more carrier frequency, and that will help build the market even more."

Liwei Kimura, the director of business development for Starwood's Hawaii Region, Greater China & South East Asia Markets, commented, "We commend HTA and Pacific Links' leadership in this niche market development as golf is a fast-emerging activity in China, not only because it is viewed as a healthy and enjoyable sport, but also because people are attracted to it as a luxury lifestyle and a statement of social status. Hawaii can benefit by targeting these higher-spending, luxury leisure travelers who can bring us more economic benefit with less impact on our natural resources. Promotion of golf travel is one of the best ways to maximize Hawaii's competitive advantages while highlighting its world-class courses to target the Chinese."

Source: Honolulu Star Advertiser, 1-12-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Controversy Still Surrounds New Residential "A" Tax Classification

In 2013, the City and County of Honolulu created the Residential "A" Tax Classification, which significantly increased the property taxes for all Oahu residential properties valued at $1 million or more, where the owner does not have a homeowner's exemption.  Residential A owners now pay $6 per every $1,000 of assessed value while those with homeowner exemptions pay just $3.50 per $1,000 of assessed value. There are approximately 8,557 properties on Oahu that have been designated as Residential A.

Opponents of the tax law argue that it is not ethical, rational, fair or legal to create tax classes based upon assessed value, when they are all built for residential use.  Previously, property tax classes were based on use, for example residential, hotel/resort, agricultural, or business.  As property values increase, there will be more and more homeowners who may be pushed into Residential A class. There is now discussion about challenging this law in court.

Source: Honolulu Star Advertiser, 1-11-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Park Lane Ala Moana Begins Owner Occupant Sales

Park Lane Ala Moana has announced that they have begun their owner occupant sales. Located on ocean side of Ala Moana Center, the property will consist of seven six-story buildings with a total of 215 units, ranging from 850 sq ft one-bedroom residents to 6,000 sq ft five bedroom penthouses.  Prices for the one-bedrooms start at $1.19 million and will go up to $28 million for a penthouse unit.  Half of the units will be restricted to owner-occupants while the others can be purchased by investors.  The investor sales began in November and most of those units have been sold.  The first phase of the project is expected to be completed late 2016 and the final phase by the end of 2017.

Source: Honolulu Star Advertiser, 1-10-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Real Estate Sales Data for Maui for December 2014

Source: Realtors Association of Maui

Single Family Home Sales Data for the Island of Maui
December 2014 - 63 Houses Sold - $565,000 Median Price
December 2013 - 78 Houses Sold - $512,500 Median Price

Condominium Sales Data for the Island of Maui
December 2014 - 122 Condos Sold - $387,500 Median Price
December 2013 - 120 Condos Sold - $365,000 Median Price

Source: Honolulu Star Advertiser, 1-10-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Electrical Bills Decrease Again in January 2015

Hawaiian Electric Company has announced that electricity rates for Oahu residents have decreased to 29.5 cents per kilowatt hour in January 2015 from 31.2 cents per kilowatt-hour the month prior.  This amounts to a saving of $10.10 for a typical household using 600 kilowatt-hours of electricity. Darren Pai, HECO spokesman, stated, "Generally speaking, the drop has been due to the drop of oil prices. As the cost of oil has gone down, the fuel portion of the bill has shrunk. It's good news for customers, because the cost of the fuel is such a big component of customers' electrical bill, but when the cost of oil goes up, the customer bill goes up. We continue to do whatever we can to break our dependence on oil."

Electrical rates in Hawaii are nearly three times higher than the national average, mainly due to the fact that the majority of Hawaii's electricity comes from burning fuel oil.  The U.S. Energy Information Administration noted that in October, Hawaii residents paid an average of 36.41 cents per kilowatt hour while the national average was just 12.58 cents.

Source: Honolulu Star Advertiser, 1-10-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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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
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Hawaiian Airlines Transports 10.2 Million Passengers in 2014

Hawaiian Airlines has announced that they flew 10.2 million passengers in 2014, surpassing the previous record of 9.9 million passengers set the year prior. Company stock prices also boomed in 2014, climbing from $4 per share from the start of the year to $26.05 per share by the end of the year. However, there is still room for improvement, as the airline's load factor, or percentage of seats filled, held firm at 81.5 percent.

Source: Honolulu Star Advertiser, 1-8-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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State Council on Revenues' Economic Predictions

According to state Council on Revenue's economic predictions, that Hawaiian Islands should see a 4.5 percent growth during the current fiscal year.  This is a significant increase from the 3.5 percent growth that was predicted in September 2014, and is due to increased consumer spending, lower gas prices, and additional tourists from the U.S. mainland.  Kurt Kawafuchi, the chairman of the Council on Revenues, commented, "The U.S. economy is very strong, and a lot of our tourists are from the mainland U.S. With the lower price of gas, people are going to have more money to spend because they're paying less for gas and electricity. We hope that contributes to more spending, more tourists and more spending in Hawaii."

Carl Bonhan, a professor of economics at the University of Hawaii at Manoa and another council member, added, "I'm still bullish on construction. There's several (projects) in Kaka­ako that are going up right now, and we're starting to see the neighbor islands start to contribute. Maui and Big Island are both seeing some growth that we didn't see at all a year ago or two years ago."

Kawafuchi cautioned that global concerns could still have an impact on Hawaii.  Kawafuchi added, "The strong U.S. economy has a downside. As the dollar gets stronger, it makes it more expensive, for example, for Japanese tourists or Chinese tourists to come to Hawaii. I think there's optimism, but people are being very cautious and careful."  The council have left the projected growth for the fiscal years of 2016 through 2021 unchanged at 5.5 percent per year.

Source: Honolulu Star Advertiser, 1-7-2015, www.staradvertiser.com
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Real Estate Sales Data for the Island of Oahu for December 2014

Source: Honolulu Board of Realtors

Single Family Home Sales Data for the Island of Oahu
December 2014 - 284 Houses Sold - $690,000 Median Price
December 2013 - 283 Houses Sold - $685,000 Median Price

Condominium Sales Data for the Island of Oahu
December 2014 - 390 Condos Sold - $361,250 Median Price
December 2013 - 390 Condos Sold - $330,000 Median Price

Source: Honolulu Star Advertiser, 1-7-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Real Estate Sales Data for the Island of Kauai for December 2014

Source: Hawaii Information Services

Single Family Home Sales Data for the Island of Kauai
December 2014 - 34 Houses Sold - $832,500 Median Price
December 2013 - 42 Houses Sold - $454,500 Median Price

Condominium Sales Data for the Island of Kauai
December 2014 - 24 Condos Sold - $400,000 Median Price
December 2013 - 21 Condos Sold - $380,000 Median Price

Source: Honolulu Star Advertiser, 1-6-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Real Estate Sales Data for the Big Island of Hawaii for December 2014

Source: Hawaii Information Services

Single Family Home Sales Data for the Big Island of Hawaii
December 2014 - 168 Houses Sold - $334,000 Median Price
December 2013 - 146 Houses Sold - $282,500 Median Price

Condominium Sales Data for the Big Island of Hawaii
December 2014 - 49 Condos Sold - $243,500 Median Price
December 2013 - 45 Condos Sold - $230,950 Median Price

Source: Honolulu Star Advertiser, 1-6-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Hawaiian Airlines Request for Kona to Tokyo Route

Hawaiian Airlines is once again requesting the U.S. Department of Transportation for an additional route to Haneda International Airport in Tokyo, Japan.  The route had previously been granted to Delta Air Lines, but Delta announced in 2014 that they will be changing their Haneda-Seattle route from daily to seasonal.  Hawaiian Airlines stated that if they are granted this opportunity, they would begin service on or about June 1, 2015 and will use a 294-seat A330-200 aircraft.  Mark Dunkerley, the president and CEO for Hawaiian, commented, "Kona continues to be a top destination for Japanese travelers, and we are more certain than ever that direct service to West Hawaii is the highest and best use for the scarce Haneda slots that are at stake here. This route would provide unmatched public benefit by improving U.S. exports, boosting spending and economic growth within the United States, and increasing U.S. jobs."

Delta Airlines has applied to retain its Seattle route, and American Airlines has also filed to create a route from Handea to Los Angeles.  There are only four routes to Haneda granted to U.S. airlines.

Source: Honolulu Star Advertiser, 1-6-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Severe Erosion Raises Concern About Waikiki's Sandy Beaches

In June 2012, the state of Hawaii's Department of Land and Natural Resources completed a beach replenishment project which added an additional 24,000 cubic feet of offshore sand to Waikiki Beach.  The project cost $2.2 billion and was funded by the joint effort of the state and Waikiki hotels.  However, a recent study by the University of Hawaii has found that one-fourth of that sand has already disappeared.  The DLNR has commented that the state and city are working together to study the recent erosion along Waikiki Beach and hopes to come up with new solutions.  However, they have added that since 1939, there have been at least 10 sand replenishment projects to Waikiki Beach.

Source: Honolulu Star Advertiser, 1-5-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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City Council to Tackle Illegal Short-Term Vacation Rental Problem

Ikaika Anderson, the zoning chairman for the Honolulu City Council, is seeking suggestions from his colleagues and the general public as to how to improve city regulations to deal with illegal short-term vacation rentals on the island of Oahu.  Operators argue that the bring an infusion of visitors to local neighborhoods, helping small businesses and the economy. Some residents, on the other hand, argue that the illegal rentals are taking away housing from Oahu residents, disturbing the peace, overtaxing the infrastructure, and increasing crime rates.  Finally, there are some people who would not mind seeing the rentals become legal provided that they pay their General Excise taxes and Transient Accommodation taxes, something that most illegal operators are not currently doing.

Anderson stated, "At this point the only thing that's clear is there is no solid, definitive answer as to how to solve this problem. I'm not going to stand up here today and come to any predetermined conclusion or be closed-minded on any proposal that comes forward either from my colleagues, their communities or from the mayor."

Source: Honolulu Star Advertiser, 1-3-2015, www.staradvertiser.com
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City Council Still Supports Rail Project But Wants More Oversight

The Honolulu City Council has stated that they still fully back the Honolulu Rail Project, but are demanding that more oversight be put into place, due to a recent announcement that the project will cost between $550 million to $750 million more than anticipated.  Ernie Martin, the council chairman, stated, "We are well aware of the financial challenges looming ahead, but this project is crucial for the future sustainability of Oahu." Martin added that the state's largest public works project must be done "in a fiscally responsible manner" and be completed by 2019, its scheduled completion date.  Martin commented, "Let's put it this way. The honeymoon is over. It's inevitable that we're going to do rail, but I think the general public's concern is to, wherever we can, curb some of that cost."

Opponents of the Honolulu Rail Project are concerned that the general excise tax surcharge may be extended beyond 2022 to pay for the increased costs.

Source: Honolulu Star Advertiser, 1-3-2015, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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