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Numbers looking up for planned office and retail center in Kapolei


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POSTED: Thursday, July 09, 2009

Hamuea Center, a planned 141,000-square-foot office and retail condominium development in Kapolei, is nearing its required sales and leasing threshold and could break ground in late summer or early fall.

Grubb & Ellis, the sales and leasing agent for the planned five-story building on Kamakila Boulevard across from the state office building, has sold or leased 60,000 square feet in the building, said Larry Stogdell, president and chief executive of L.A. Anuenue LLC, the project developer.

“;We only need to get 12,000 square feet more sold or leased to proceed with the project,”; Stogdell said. “;We've been very fortunate that other planned projects haven't gone through, and that's brought a lot of attention to our project.”;

Oahu's declining economy has caused other developers to put planned commercial development on hold, said Mike Hamasu, consulting and research director for Colliers, Monroe Friedlander.

“;At this point, I'm not aware of any other office project in Kapolei moving forward,”; Hamasu said. “;DeBartolo Development has plans for office space in West Oahu, but not as soon as 2010.”;

Hamuea Center, which is L.A. Anuenue's first venture into commercial real estate development in Hawaii, has benefited from the withdrawal of planned West Oahu projects, Stogdell said.

“;If supply shrinks and demand stays the same, you benefit if you are the last man standing,”; Hamasu said.

While Hamuea Center hit a few roadblocks early on, it was able to adjust to the market, he said.

The project came to market as a high-tech center, but was not able to get the sales traction it needed and fell 120 days behind schedule, Stogdell said.

“;We couldn't find demand for that use in this economy,”; he said. “;However, we've attracted lots of medical and professional tenants.”;

Leasing got off to a slow start in April, but momentum picked up in June and has been fairly steady, Stogdell said.

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“;People are starting to get comfortable with the idea that the sky is not going to fall on Hawaii,”; he said, adding that the project will create more than 350 jobs during build-out and more than 450 jobs when occupied.

Stogdell said he expects to deliver the 65 condo-unit project by the last quarter of 2010 or the first quarter of 2011.

Condo space, which ranges from 800 to 4,600 square feet, will start in the mid-$600,000s, he said.

Ground floor and penthouse space will sell for significantly more, with premium spaces topping out around $6 million, Stogdell said.

“;Timing is everything,”; Stogdell said. “;We expect to be the only game in town in early 2011 when the first buyers and tenants take occupancy.”;

As a result of the project's favorable supply-demand ratio, pricing is trending higher than leasehold condominiums in urban Honolulu, which sell for $450 to $550 a square foot, Hamasu said.