High-rise developer allured by Waikiki
Fifield Cos. picked the Wave Waikiki site as one of the last available spots in the tourist mecca
Timothy O'Brien, senior vice president and West Coast principal of Fifield Cos., believes in taking an opportunity when he sees it.
So when a 2.2-acre lot at 1837 Kalakaua Ave. went back on the market again earlier this year, Fifield tossed its hat into the ring.
The Chicago-based real estate development firm specializes in urban-infill projects in tight real estate markets that have high barriers to entry. Among the projects it specializes in are ultra-luxury condominiums, luxury residences and mid-rise office towers.
The $300 million development of Allure Waikiki, the recently announced luxury residential tower at the Wave Waikiki site on Kalakaua, will be Fifield's first project in Hawaii.
"What appealed to us was that it was one of the last sites left in Waikiki," O'Brien said. "We're very impressed with all of the redevelopment in Waikiki, and this site automatically fit our criteria. It will link the Ala Wai Canal to Beach Walk. Kalakaua is an avenue that's meant to be walked."
Fifield had been searching for potential development sites in Hawaii for the last three years, according to O'Brien. It considered several parcels in Waikiki, but decided to take a chance on the $21 million purchase of the lot from Los Angeles-based Oaktree Capital Management LLC.
Despite the higher construction prices in Hawaii, Fifield is confident there will be demand for its luxury residential project from baby boomers. Fifield says it prides itself in efficient building design with tightly controlled development costs.
O'Brien estimated the costs of building in Hawaii will be higher than in Los Angeles, but lower than in San Francisco.
Fifield, a private company founded in 1977 by Chairman Steven Fifield, then known as Fifield, Palmer & Co., got its start as a suburban officer developer. It evolved into a developer of both high-rise urban office and residential buildings in major cosmopolitan cities.
To date, the firm has developed more than 50 buildings worth more than $3 billion, according to Fifield's corporate Web site.
It has completed numerous high-rises across the nation, with most of them in Chicago, but more current projects migrating west toward Las Vegas, southern California and San Francisco.
The "Allure" name is part of a lifestyle brand name by Fifield for its projects in resort destinations.
Fifield also is building Allure Las Vegas, a proposed 900-unit luxury condominium project in twin 41-story towers, and Allure Ft. Lauderdale, a proposed 285-unit luxury residential project in southeast Florida.
Initial sketches of Allure Waikiki include a 35-story residential tower, five-level garage and standalone restaurant measuring about 12,000 square feet. The lot is zoned resort commercial, with a height limit of 320 feet.
Unlike Paul Thoryk, the San Diego-based architect originally contracted to purchase and develop the lot, Fifield does not plan to build higher than the site is zoned for.
The development will reflect classic Hawaiian architecture and feature plenty of open spaces and lush landscaping, according to Joe Farrell of Architects Hawaii Ltd.
Space for the restaurant has been set aside on the Ewa end of the site, where two dilapidated walk-up apartments now sit. Leasing for the restaurant site has not begun yet, though O'Brien is talking to brokers.
Allure Waikiki's lobby is expected to front Kalakaua Avenue, sitting in the place of the now-closed popular nightclub Wave Waikiki.
O'Brien said he successfully negotiated the purchase of two privately-owned lanes -- Makaoe and Pau -- on the Kalakaua lot from a local family. Without the ownership of those lanes, he said, Fifield would have pulled out of the deal altogether.
"Without those lanes, we would have been making too many compromises," he said. "In projects this big, you don't want to make any compromises."
He declined to disclose the purchase price for the lanes.
Even then, he called the lot a "tough site" with an odd shape. But he expects Allure Waikiki to be a quality project competitive with other recent luxury projects such as the Watermark Waikiki, just around the corner.
Prices will be based on the market, with units for the two-bedrooms starting at around $800,000. Rental rates will also be on par with market rates.
O'Brien says Fifield will keep an eye on other potential sites for development in Hawaii. "We want to set a good track record with this project first," he said.
Fifield expects to break ground on Allure Waikiki in the second quarter of 2007, with completion in another two years. Sales are expected to begin in the fall.