Alakea tower
offering leases again
Alakea Corporate Tower, which A&B Properties Inc. converted from rentals to office condominiums last fall, is once again offering leaseable space.
Since the last occupied unit went into escrow, CB Richard Ellis has begun a push to lease approximately 57,000 square feet of space, divided among 10 and a half floors, said James C. Shipman, senior vice president at CBRE. Although the space is still on the market for owner-users to purchase, it is also available for renters, he said.
Two blocks from the State Capitol, the Alakea Corporate Tower offers 29 floors of office condominiums, ground-flour retail space, six below-grade parking levels and a residential penthouse unit. The condos, which range from about 1,500 to about 5,500 square feet, were initially offered for sale as half and full floors.
Since A&B bought the 31-story building last March, it has sold 16 floors, with four more in escrow, said Norb Buelsing, executive vice president of A&B Properties.
The company decided to return to offering leased space in Alakea Corporate Tower to attract investor-buyers, Buelsing said.
"We haven't seen a drop off in interest in office condominium sales, but we wanted to be able to satisfy the strong demand from investor owners," he said.
In order to fuel leasing, CBRE is offering attractive rental rates for prospective tenants, Shipman said.
"The whole plan was to sell the floors out to owner-users, but there was such a big demand to purchase occupied floors that we began a leasing program," Shipman said.
Lease terms include 12 months of free gross rent for qualified tenants on 72 month terms for full-floor tenants, he said.
The change should not significantly soften Honolulu's rental office market, Buelsing said.
"While we are open to interest from potential tenants, realistically we don't expect it all to be leased," he said, adding the property is still attracting notice from owner users.
Formerly owned by Japanese investors, Alakea was built at a cost of $73 million. When A&B purchased the building for $20 million last year, it was less than 50 percent occupied.
The company invested an additional $1.5 million in the building to improve its lobby and to add a fountain, landscaping, state-of-the-art conference room and 24-hour security system.
"So far it's been a very successful investment," Buelsing said.
"We have been pleased at the rate of sales, but of course, it's not completely successful until the last floor has sold."