Tenant interest in neighbor island commercial properties is rebounding after a sharp drop following Sept. 11, a real estate developer told a conference in Waikiki yesterday. Commercial real estate
shows signs of recoveryNew neighbor island retail and office
space is in demand again after being
abandoned in the wake of the Sept. 11 attacksBy Russ Lynch
rlynch@starbulletin.comThe outlook is positive, said Mark Richards, president and chief executive officer of Maryl Group Inc., which has a broad range of commercial, residential and retail developments on the Big island and, more recently, Oahu.
Advance leasing for a new professional office center in Kailua-Kona prior to Sept. 11 showed that the property was a sell-out, he said.
"And now it's 30 percent leased," Richards said. However, negotiations are now going on concerning potential leases for another 30 percent so the commercial real estate picture is not all that bad, he said.
Meanwhile, overall occupancy of the 280,000-square-foot Crossroads project, most of which is retail, is running at 96 percent, he said.
Richards told a session of a conference hosted by the local chapter of the International Council of Shopping Centers that luck played a part in the Crossroads success. One of the early tenants his group lined up was Wal-Mart, while Kmart booked into another developer's complex nearby. OPressure from environmentalists led the other developer to move back, away from Alii Drive, to a location where it is now "barely visible," he said.
In the early '90s, Maryl Group planned residential development for its Kona property but the economy worsened and housing got so hard to sell that "you couldn't give it away," Richards said, so the decision was made to go for an office-retail complex.
Elsewhere on the Big Island, at the Villages at Mauna Lani, the Maryl Group had tentative sales of 13 homes, but that dropped to just two commitments after Sept. 11. It crept back to 13 and stayed there a while, but now is increasing by about one sale a week. Maryl's Shops at Mauna Lani project, yet to start construction, will do well because of the steady stream of tourists from the mainland that want to shop and eat some of the time away from their hotels, Richards said.
Scott A. Crockford, vice president/retail of Maui Land & Pineapple Co., said his company's 40-acre mixed-use project in upcountry Maui, tentatively called the Pukalani Triangle, is gaining interest.
The company's older retail development, the Queen Kaahumanu Center a few minutes from the Kahului Airport, took two hits in a row.
"We had 9/11 and then Wal-Mart opened Oct. 31" down the street a bit, said Crockford, who is responsible for commercial and retail development of Maui Land & Pineapple property.
Meanwhile, the company is getting a good response to its Pukalani project. The land was in pineapple but agriculture became uneconomical when the property was split by a highway bypass, he said. What is planned there now is a "rural country village," he said, with a mixture of commercial and retail space, a civic and professional office complex, an area set aside for "cottage industries" and Maui Fresh, a visitor destination to sell pineapple and other produce, he said.
Crockford said a village green will hold the elements together and there will also be 10 acres of pedestrian and equestrian trails. The project is aimed at an area where the community is "fairly anti-growth" but the local reaction so far has been favorable, he said. Some government approvals are still needed but the project is to be completed in 2006, Crockford said.