Hawaii Real Estate and Economy

Saturday, February 2, 2013

$2.5 Million Damage Caused by Fire at Cheesecake Factory

On February 1, 2013, at 3:32 A.M. a fire broke out in the kitchen area of the Cheesecake Factory on Kalakaua Avenue in Waikiki. A total of forty firefighters from eight fire companies responded to the blaze and had it under control by 4:45 a.m. and completely extinguished by 5:30 a.m. Fire Captain Terry Seelig state that the fire was caused by a gas leak to the fryer in the kitchen that was ignited by the pilot light. No one was hurt in the blaze, but the damage will cost an estimated $2.5 million to repair. No word as to when the Cheesecake Factory will reopen.

Source: Honolulu Star Advertiser, 2-2-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com

Hawaii Bankruptcy – Numbers Fall for 23rd Consecutive Month

According to a report released by the U.S. Bankruptcy Court, the total number of bankruptcy cases in Hawaii were just 159 for the month of January 2013. This represented the 23rd consecutive month of lower numbers filed in bankruptcy court. Honolulu County had a total of 100 filed in January, a 28 percent from the same month a year prior. Hawaii County (Big Island of Hawaii) had 16 cases, a decrease of 33.3 percent from January 2012. Maui County had 30 cases, a decrease of 18.9 percent. Kauai County was the only county to experience an increase from a year prior of 13 cases up from 12 cases.

In related news, there has also been a decrease in the amount of credit card debt that Hawaii residents carry. According to Credit Karma, Hawaii residents carried an average of $6,620 in credit card debt in December 2012, which was a 12 percent decrease from the same month a year prior. Credit Karma also noted that Hawaii had the highest average credit score at 668.

Waikiki Real Estate – Five Year Lease Given to Queen’s Surf Cafe and Lanai

Optimum Marketing and Management Corp. which operates the Queen’s Surf Cafe & Lanai in Waikiki, has been given a five-year lease from the city and county of Honolulu. The food concession is located in a prime oceanfront location in Kapiolani Park and the city was under recent criticism from the public for renting the space for such a low amount to Optimum and not allowing other companies to bid on the location.

Under the new permit, Optimum would be required pay the city $500 per month and 5 percent of the gross sales for the first two years. In the third year, Optimum would pay $750 per month and 6 percent of their gross sales. In the fourth year, the fee would increase to $1,000 per month and 6 percent of gross sales and in the fifth year the fee would be $1,000 per month plus 7 percent of their gross sales. Optimum would also be required to maintain the public restrooms located near the concession stand.

Waikiki real estate retail analyst, Stephany Sofos, commented, “It’s a little low for Waikiki, but they are paying the normal standard rent across Hawaii. Given that the whole idea here is to have a concession that provides a service to Kapiolani Park users, it’s a fair exchange. This new deal is substantially higher than what they were paying before. However, the city isn’t gouging them because they are in Waikiki.”

More Airline Seats to Hawaii in 2013

According to the Hawaii Tourism Authority, an additional 680,313 airplane seats to Hawaii will be added in 2013. This is an increase of 6.8 percent, and brings the total available airplane seats to 10.75 million. President and CEO of the Hawaii Tourism Authority, Mike McCartney, stated, “The success of our visitor industry has a direct correlation with the increased airlift, and we are committed to ensuring that we maintain a strong inventory of air seats to support our industry and our state’s economy.” The HTA is hoping for another record breaking year in 2013 with increases in visitor arrivals and visitor spending.

Friday, February 1, 2013

Kakaako Real Estate – IBM Building to Remain, $20 Million Remodel

The Howard Hughes Corporation has announced that they will be retaining the IBM Building, located at the corner of Ala Moana Blvd and Queens Street in Kakaako will not be demolished at this time and will actually undergo a $20 million interior remodel. The exterior “concrete sunshade grille” look will be preserved. According to the Hughes Corporation, the plan is to convert the ground floor of the office building into an information center which will explain the history of the neighborhood as well as the Hughes vision for the future. Hughes hopes to transform the Ward Centers into a 60-acre urban village with a total of 22 new condominium towers as well as new shops and restaurants over the next 15 years. The buildings top two floors will become a condo sales center and feature model units for the new condominium towers.

Source: Honolulu Star Advertiser, 2-1-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com

Maui Real Estate – Ritz-Carlton Condominium and Time-Share Sold at Foreclosure Auction for $100 Million

Lantern Asset Management has purchased the Ritz-Carlton Condominium and time-share resort on the island of Maui in a foreclosure proceeding for a total of $100 million. The 24-acre oceanfront property is the home of nine low-rise condominium structures and was built by a partnership between the Maui Land & Pineapple Company, the Ritz-Carlton Hotel Company, and Exclusive Resorts LLC in 2007 for $355 million. However, due to the recession and problems in the financial market, Lehman Brothers, who was the project’s main lender, filed for bankruptcy in 2008. This move significantly halted sales and created additional challenges for the developer.

In June of 2012, a group of lenders who replaced Lehman Brothers as the main lender filed a foreclosure lawsuit against the developer for $300 million owed to them. In addition, in June of 2012 a group of condominium owners filed a lawsuit against the developer for breaching their fiduciary duties. In July of 2012, the Ritz-Carlton announced they would no longer be managing the property due to the fact that operating costs were not being sufficiently funded. Currently, only 28 out of the 84 condominiums have been sold and only 177 of the 744 interests in the time-share units have been sold. The property is now known as the Residences at Kapalua Bay and is under the new management by the Timbers Resorts since the beginning of this year.

2013 Tourism Outlook Excellent

The Pacific Asia Travel Association and the Travel and Tourism Research Association hosted a 2013 Outlook and Economic Forecast panel to discuss the Hawaii tourism industry and the outlook for 2013. While each set of experts and economists had slightly different predictions, all trends point to an excellent year. The University of Hawaii Economic Research Organization (UHERO) predicts that the number of arrivals to the Hawaiian Islands will increase by 3.6 percent in 2013 and that visitor spending will increase by approximately 11 percent. In comparison, the state Department of Business, Economic Development and Tourism predicts a 3.9 percent increase in arrivals and a 5.2 percent increase in spending. Discussing hotel occupancy, president and CEO of Hospitality Advisors LLC, Joesph Toy, stated that he predicted that hotel occupancy rates would increase by 3 percent across the state, and that hotels would see a 6.9 percent increase in their average daily rate.

Hawaii Tourism Authority’s director of tourism research, Daniel Nahoopii, believes that Hawaii’s visitor industry still has a lot of room to grow. Nahoopii stated, “The new peak for this year was not the peak for the U.S. market. We had more visitors from there in 2006 and 2007. The peak for international arrivals goes even farther back.” One of the main goals for the Hawaii Tourism Authority in 2013 is to encourage visitors to spend more time on the neighbor islands, which have significantly low hotel occupancy rates as compared to Oahu.

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