Hawaii Real Estate and Economy

Sunday, January 6, 2013

Humpback Whales Help Economy

Each year thousands of humpback whales migrate to the Hawaiian Islands from the North Pacific to mate and breed. According to data released by the Hawaiian Island Humpback Whale Marine Sanctuary, whale watching contributes approximately $74 million a year to the state’s economy and approximately $11 million in state tax revenue. The Sanctuary’s communication coordinator, Christine Brammer, stated, "Interest in humpback whales in Hawaii includes whale watching and research, both of which add significantly to the local economy to create jobs to feed our families and generate taxes to help our schools and other infrastructure.”

Source: Honolulu Star Advertiser, 1-6-2013, 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

Saturday, January 5, 2013

Maui Real Estate – Timbers Resorts Takes Over Management at Ritz-Carlton Club and Residences

Timbers Resorts, a Colorado-based company, has announced that they have taken over the operations and management of the former Ritz-Carlton Club and Residences in Kapalua on Maui. The property has now been renamed the Residences at Kapalua and includes a total of 84 condominium units and 62 time-share units. Chief Executive Officer of Timber Resorts, David Burden, stated, “Our vision is to bring Timbers Resorts’ high level of service and hospitality to the property while providing unparalleled amenities and an overall wonderful experience for the owners.”

President of Kapalua Bay Vacation Owners Association, John Chaney, added, ”We are extremely pleased that we are able to retain a management company with the reputation and service level of Timbers Resorts and we are really looking forward to working with them in 2013. We hope to duplicate the success here that they have achieved at so many of their other resorts around the world.”

Source: Honolulu Star Advertiser, 1-5-2013, 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

Friday, January 4, 2013

Hawaii Bankruptcy – Filings Decrease by 24 Percent in 2012

According to the United States Bankruptcy Court, there were a total of 2,528 bankruptcies filed in Hawaii for 2012. This was a 24 percent decrease from 2011 when 3, 325 cases were filed, and the lowest number since 2008. For the month of December, Honolulu County saw a decrease of 28 percent from the same month a year prior, while Maui County saw a 43.5 percent decrease and Kauai County a 33.3 percent decrease. In related news, Credit Karma reported that the amount of average credit card debt in Hawaii decreased to $6,451 in November 2012, which was a 12.7 percent decrease from the same month a year prior. Hawaii residents had the highest average credit score in the nation at 667.

Source: Honolulu Star Advertiser, 1-4-2013, 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

Office Vacancies Hold Steady for Oahu in 2012

Colliers International, a commercial real estate firm, has released that Oahu’s office space vacancy rate remained steady at 13 percent for 2012. This static rate was identical to the one posted at the end of 2011 and has actually left commercial real estate companies optimistic about the future. For the five years prior to that, there had been a steady increase in vacancy rates, and a leveling effect tends to indicate that the market is stabilizing. As a point of comparison, office vacancies on Oahu were at 7 percent in 2006, prior to the start of the recession. There were 1.9 million sq ft of vacant space on Oahu at the end of 2012.

Economic Analysis of Downtown Honolulu

Macy’s Inc. has announced that they will be closing their downtown Honolulu location at Fort Street Mall on February 28, 2013. Macy was the only major department store in downtown Honolulu, leaving many real estate experts wondering what direction the area will take in the coming years. One major challenge for retailers in downtown is the fact that most of the office workers leave by early evening, leaving the streets completely empty. Stephany Sofos, a real estate analyst, commented, “You need more residential (occupancy) to make it a vibrant city that doesn’t roll up their sidewalks at 5 p.m. when everyone goes home from work. That’s why putting in a residential component with office and retail would be the highest and best use because you’d have all moving parts together, people working there, eating there and sleeping there.” Darcy Lampe, a Macy’s store patron, agreed and added, “It’s like a ghost town here on the weekends, But you can see it gets a lot of traffic at lunchtime.”

Aloha Tower Marketplace Dispute Update

In December 2011, real estate developer Ed Bushor purchased the Aloha Tower marketplace for approximately $14 million. Bushor’s financial partner was Hawaii Pacific University who came up with the money for the actual purchase. Bushor’s idea was to renovate the Aloha Tower Marketplace and convert the currently vacant shops into student dormitories and other amenities for Hawaii Pacific University. However, in a recent turn of events, HPU has used a provision within the contract to forcefully buy out Buchor’s 20 percent interest for $5 million and has removed Bushor as the project manager.

Hawaii Pacific University has decided to proceed with the redevelopment that Bushor had come up with, but is still waiting from the state’s permission to assume complete management and ownership of Aloha Tower Marketplace. HPU plans to spend an additional $32 million and would add new retailers, restaurants, a dorm for 320 students, additional parking and office spaces, and a sports and entertainment complex. The complex would be renamed the Tower District.

Developer Ed Bushor has hired attorney Michael Green, who has filed litigation against HPU for fraud. This could significantly slow Hawaii Pacific University’s redevelopment plans, as it is likely that the state would wait to give approval until the litigation issue has been resolved.

Additional State Tax Revenue Forecast

The state of Hawaii’s Council on Revenues has announced that forecast an increase of state tax revenue by 5.1 percent during the 2013 fiscal year, which will end in June 2013. This was an increase from the 4.9 percent predicted by the council in September 2012 and would mean an additional revenue of $10.3 million that the state could spend. Furthermore, the Council on Revenues predicts that revenue growth would grow by 6.8 percent for the 2014 fiscal year, an increase from the 3.9 percent that they had predicted previously. Governor Neil Abercrombie commented, “I am pleased the Council on Revenues is taking a long-term view of our economic future, which coincides with our financial plan, working responsibly toward a stable fiscal growth. The budget proposal that we submitted to the Legislature is mindful of the revisions of the council. The rate of revenue growth that they continue to forecast in the current year makes sense and is still very strong.”

However, economists remain very cautious, and worry how changes in federal spending and plans to reduce federal debt would affect Hawaii in the years to come. Furthermore, Hawaii’s strongest political champion, U.S. Senator Daniel Inouye has passed away in December of 2012, and experts predict that would severely hurt Hawaii in the coming years. State budget director, Kalbert Young, commented, “My opinion is that there is no way to quantify or measure, because the value that Sen. Inouye contributed in terms of what he was able to accomplish for Hawaii, not only in funding, but politically in Congress, leadership, all of those components. There is no way to measure how big that impact is. And how much can the current congressional team overcome those issues? There’s just no way to measure that.”

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