Big Island

Waikoloa Highlands Center for sale $19.9M

Waikoloa Highlands Center on the Big Island is on the market for $19.9 million.

The neighborhood shopping center, measuring 73,524 square feet, has 43 tenants and is anchored by Waikoloa Village Market, a subsidiary of KTA Super Stores.

Owner 3-D Investments of California has traded offers with four prospective buyers, according to property broker Mark Bratton, who expects to sell the shopping center this summer.

Other tenants include Chevron, First Hawaiian Bank, Hawaii Family Dental Center and Subway, as well as a number of doctors and dentists.

The center is 76 percent occupied, even though Hilton Grand Vacations left a significant amount of space vacant after consolidating operations about 18 months ago.

Source: PBN

Big Island

Lender takes Fairmont Orchid

A lender quietly acquired The Fairmont Orchid Hawaii in lieu of foreclosure earlier this year, giving the luxury hotel at Mauna Lani Resort on the Big Island its fourth different owner in seven years.

An affiliate of New York-based lender Barclays Capital in June repossessed the 540-room hotel from Westbrook Partners LLC, a Boston-based real estate investment firm that bought the 32-acre oceanfront property for $250 million in 2005, property records show.

A spokesman for Barclays Capital declined to comment. The company is expected to keep the property at least until the local hotel and real estate markets improve.

The deal hasn’t affected the operation of the hotel, which is managed under a long-term contract by Fairmont Hotels & Resorts Inc. But it adds to a growing number of Hawai’i hotels being taken over by lenders amid the economic downturn that has hurt the state’s tourism industry and investors that paid hefty prices for hotels in the past few years.

“I expect there’s going to be more of that,” said Joseph Toy, president of local tourism industry consulting firm Hospitality Advisors LLC. “Clearly the distressed hotel market is very active.”

Toy said the economic downturn was so sharp that even sophisticated hotel buyers who had significant capital reserves are having problems keeping their mortgages out of default.

Westbrook bought the Orchid in December 2005, and 18 months later had listed the property for sale through brokerage firm Eastdil Secured LLC. The offer attracted significant interest, but didn’t result in a sale.

The $250 million paid by Westbrook was a record price for the hotel, and was almost twice what the previous owner paid.

Westbrook bought the hotel from Fairmont, which had paid $140 million in 2002 to acquire the hotel from Los Angeles-based investment firm Colony Capital LLC, which in 1995 paid $75 million for the hotel then known as the Ritz-Carlton Mauna Lani.

Ritz-Carlton Hotels and a Japanese partner, ONKD Inc., spent $175 million to develop the property, which opened in 1990.

Other Hawai’i hotels that have faced mortgage trouble recently include the Ilikai in Waikiki, which was acquired by a lender through foreclosure in July, and the Maui Prince Hotel, which is under receivership after a consortium of lenders sued to foreclose on the property last month.

Source: HNA

Big Island

Kailua Kona Commercial Lot

Great location, spectacular views and easy access. Last original lot sale by developer of new commercial subdivision. Priced to sell at about $50psf net of roadway. Nearby lots listed above $80psf. Rare opportunity in center of Kailua-Kona, close to everything. Western boundary of property is the Pa Kuakini (Great Wall of Kuakini), which must be preserved and has a twenty-foot buffer zone which can not be built in. Site is accessed by private road from Hale Kapili. The private road is owned by this property and Lowes HIW. An existing agreement requires both owners to maintain the road.

Big Island

Kaloko Shopping Center

Kaloko Shopping center is located at the heart of “Kaloko Heights,” a residential master-planned community entitled for about 1,500 dwelling units. The new in-fill neighborhood shopping center will provide a community based shopping experience nestled in the existing supply-constrained area of Kona. With 550 feet of frontage along the major arterial road “Hina Lani Drive”, which links Queen Kaahumanu Highway with the Hawaii Belt Road, this property finds itself in the highly desirable elevations of Kona which are extremely popular with residents. Conveniently situated adjacent to Kona Heavens subdivision, The Kaloko Shopping Center will also serve all the established communities of Kalaoa, Kohanaiki, Kaloko, Honokohau, Hualalai, Holualoa, and Kealakehe.

Big Island

Hualalai Gardens Development Land

This land has a Planned Unit Development approval for 27 lots of one acre or more, and is close to subdivision approval. A former nursery, this property is quite picturesque and scenic. Great opportunity for development or land bank, or a spectacular estate!

Comments: An absolutely ideal location with spectacular views, just minutes above Kailua-Kona town, the harbor and schools, and the airport. This site sits at “Palani Junction”, the gateway to “Holualoa Town” and “Old Kona”, with coffee trees, avocado, mango, rambutan and other agricultural products dotting the lush mountainside. Easy access to the resorts, golf courses, and other amenities of West Hawaii, but a world away from the hustle and bustle of city life. Great lifestyle options.

Big Island

Lehman loan jams up Big Island project

A $105 million loan by Lehman Brothers to pay for development of 5,700 acres of former sugar plantation land on the Big Island is the latest financial deal ensnarled by the Lehman bankruptcy.

With the job unfinished and Lehman’s assets in limbo, the developers have asked a New York bankruptcy court to make a decision on assuming or rejecting the loan.

The borrowers are led by Massachusetts resort developer Alan Worden. If the loan is rejected, Worden wants to be able to seek alternate funding, according to a motion filed Friday in the U.S. Bankruptcy Court in New York. The court has set an April 7 hearing on the matter.

Worden’s group purchased the land in the Big Island’s Kau district in 2006 and had projected it would take three to five years to build out the infrastructure and secure approvals and permits to build a high-end residential development consisting of large homes on “farm” lots. They planned to subdivide and sell the land, which would have an average density of one home per 20 acres.

Lehman Brothers stopped funding the loan after it filed for Chapter 11 bankruptcy protection on Sept. 15, 2008, disrupting the project. Up to that point, the developers had borrowed $43 million of the $105 million, according to the motion.

The motion said that Lehman Brothers, in discussion with the Hawaii borrowers, had indicated that it would reject the loan, but has not done so. That inaction has adversely affected dozens of contractors and other employees who cannot be paid without the Lehman funding, the document said. The project owes at least $335,000 to local workers, according to a declaration filed by Worden.

“Those contractors’ work is essential to obtaining permits for the acquired land necessary to realize its full value,” the motion said. “Lehman’s failure to fund the project’s operating costs has thus severely disrupted the project’s ability to obtain necessary permits and has been so devastating that the Hawaii borrowers’ damages may exceed the amount borrowed.”

Worden is the managing member of Windwalker Hawaii, which is the managing member of WWK Hawaii Holdings, which owns all the interests in the borrowers, WWK Hawaii-Waikapuna, LLC, WWK Hawaii-Moaula, LLC, WWK Hawaii-Honuapo, LLC, WWK Hawaii-Little Honuapo, LLC, WWK Hawaii-House Parcel, LLC, WWK Hawaii-House Parcel 2, LLC, and WWK Hawaii-Naalehu Parcel 1, LLC.

Worden is also founder and CEO of Scout Real Estate Capital, which is based in New York City and Nantucket, Mass., and president of Windwalker Real Estate in Nantucket.

Source: PBN