COURTESY SAYRE PUBLIC RELATIONS
The developer of the Chelsea, shown above in an architectural rendering, sees room in the market for smaller, affordable condominium projects. He has another under way in Wahiawa and is looking for sites for more projects.
Boutique condos make a comeback
A slowdown in the housing market has developers turning to smaller projects
STORY SUMMARY »
This week's groundbreaking for the Chelsea, a five-story condominium project at the corner of Pensacola and Kinau streets, signals the return of the boutique condominium in Honolulu.
These projects, typically four to five stories high on relatively small lots, mean lower construction costs for developers -- and more affordable prices for buyers.
Chicago-based Chelsea developer Falah Shams isn't interested in joining the recent boom in luxury high-rises.
"The main thing is to try to keep the prices down in the affordable arena, but to still offer nice units," he said.
Shams has another such project under way in Wahiawa, and is looking for other potential sites to develop. And he's not alone in taking a fresh look at the niche.
FULL STORY »
Welcome the return of the boutique condo.
Groundbreaking for the Chelsea, a five-story boutique condo project at 1310 Pensacola St., happened earlier this week. Several more such projects are to come.
Chicago-based developer Falah Shams has one other project, Parkside at Kilani, in the works in Wahiawa, and is actively looking for other developable sites.
"There are two things we're looking for," said Shams. "An affordable price range and the right location."
Shams said he was targeting the Hawaii market for his boutique projects because the demand for rentals and affordable housing is here. He is targeting mostly owner occupants.
"The main thing is to try to keep the prices down in the affordable arena, but to still offer nice units," Shams said.
The price per square foot for a high-rise goes up with the height, according to Shams, which means more cement and more investors. He prefers sites where an older building can be demolished and replaced with a new one.
The Chelsea offers 44 units, mostly one bedrooms, starting at $335,000. So far, 30 are taken. The two-bedrooms are priced at $590,000.
The building will offer few amenities, but the units themselves will offer generous lanais measuring 210 square feet, and two tandem parking spaces per unit.
In Wahiawa, the Parkside at Kilani will offer 28 townhomes -- three-bedroom units, with design options that include loft spaces and expanded lanais. Prices there begin in the mid-$400,000s.
The past two to three years have been marked by a boom in high-rise condominium construction in Kakaako, Waikiki and downtown Honolulu. Developers have also converted hotels to condos, and bought up mid-rise buildings to sell as condos.
Now there is a return to development of smaller condominiums from the ground up.
Real estate analyst Ricky Cassiday says the slower housing market and lending environment means developers are more risk-averse.
Boutique condominiums are less risky, he said, though the concept has been around for a long time, with past projects dotting Moiliili, Makiki, Punahou and Aiea.
Kai McDurmin, a vice president at Coldwell Banker Pacific Properties, which is handling sales for the Chelsea, says there has been a strong level of interest.
"The buyers who have bought into the project like the fact that it's a smaller building instead of 300 to 400 units," she said. "And they like the price points. It meets the niche for buyers who can't afford, or don't want to pay, the prices for some of the luxury high-rises."
People are also willing to downsize from homes in suburbs to move back to town, she said, to avoid the hassle of traffic and commutes. Some of them have kids that attend schools in town.
Shams isn't the only developer to have noticed the niche.
U.S. Pacific Development LLC is also planning a new four-story condo project, to be called Skyline Honolulu, on the slopes of Punchbowl.
On Shams' projects, Architechnology is doing the design work, with Metcalf Construction Co. as builder. Sales for both began in March.