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Last homes at Big Isle
resort site selling fast
Villas at the 65-acre project
are priced at up to $4.4 million
A pre-sale frenzy at Ke Kailani, the last ocean-front development in the Mauna Lani resort, has been entertaining to say the least.
The 65-acre upscale residential resort on the Big Island's Kohala Coast is being developed by Michael Fuchs, who made his name as the former chief executive at Home Box Office and as chairman of Warner Music Group Corp.
News of the project and Fuchs' affiliation as primary investor has made its way over the real estate wires and in top news publications across the United States, including the Wall Street Journal.
"The investment community, especially in New York and Los Angeles, watches Hawaii very closely," said Will Beaton, Ke Kailani's chief executive and founder of the Hawaiiana Development Group LLC. "Most of the major developments in Hawaii since statehood have been funded by people from the mainland."
Ke Kailani, a gated development with unobstructed ocean, golf course and mountain views, is expected to attract celebrity buyers as well as wealthy entrepreneurs and baby boomers.
The upscale development will consist of 20 luxury villas, retailing for $3.5 million to $4.4 million, and 1- to 1.5- acre lots, ranging in price from $1.5 million to $8.5 million.
Site work on the development, which has mountain views of Mauna Kea, Mauna Loa, Hualalai, Kohala and Maui's Haleakala, began in January.
Villa construction is expected to begin this fall with occupancy by fall of 2006.
Fuchs purchased the property from a subsidiary of Tokyu Corp. in 2002 for about $15.5 million and plans to spend about $150 million to turn it into Mauna Lani's most upscale residential community, Beaton said.
"For me, this is a legacy project that I want to look back on and be proud of," said Fuchs, who began coming to the resort 20 years ago during his tenure at HBO.
"I'm not a mainstream developer trying to maximize my profits, but instead an individual who believes that I have a personal responsibility to tread lightly on this land; to build something special that will stand the test of time," he said.
Health, wellness and appreciation for Hawaiian culture have played an integral part in the design of Ke Kailani, which is being spearheaded by lead architect Francis Oda, chairman of Group 70 International, Fuchs said.
"I envisioned Ke Kailani to be a peaceful, healthy environment for family living, as well as an authentic reflection of the islands' environmental character and cultures, so we've paid careful attention to the details relating to the archeological, historical and cultural traditions of this special place," he said.
The development will include a 5.5-acre wellness park, which includes a freshwater pond, keiki and family swimming pools, hula mound, fitness hale, jogging trail, tennis court as well as volleyball and basketball courts.
It also will include an oceanfront grotto that comes complete with an infinity pool, two spas and amenities for entertaining and lounging.
The 3,300-square-foot villas boast exclusive kitchens designed by Chef Alan Wong using the principles of feng shui. Each villa also will have its own pool and spa.
Three-quarters of the initial release at Ke Kailani has been sold since the project went to market last month, Beaton said, adding that developers will release the additional units a few at a time so that they can control pricing.
While it's unknown whether or not any of Fuchs' celebrity friends will buy in Mauna Lani, he's reserved an ocean-front lot so that he can build himself a single-family home in the development, he said.
"He has close friendships with many well-known entertainers and has let them know about the project," Beaton said. "It's possible there could be some interest."
But most of Mauna Lani's buyers likely will be pulled from experienced Kohala Coast and Mauna Lani investors and second-homeowners, he said.
"These are very successful entrepreneurial people who are looking for a long-term investment in Hawaii," Beaton said.
The incredible wealth of the baby-boomer generation, who are coming into inheritance, while realizing the fruits of their labors, has buoyed the second-home market, especially on the neighbor islands, he said.
"We've already sold nine lots and two villas," Beaton said, adding that sales are expected to be especially heavy this month and August during summer's peak visitor market.
Mauna Lani was initially master-planned in the late 1970s and early 1980s and is home to eight other residential developments, including the popular 49 Black Sand Beach.
Currently, Mauna Lani has at least four other projects in development or construction. Among the most talked-about ventures under construction is Stanford Carr's Fairway Villas project, which was reportedly a sellout.
Ka Milo, a joint residential real estate venture between Brookfield and A&B Properties, likely will go to market during the third quarter of this year, said Mike Wright, project manager for A&B Properties.
Ka Milo, which is comprised of 137 single-family and duplex units, is surrounded by the North Golf Course at Mauna Lani resort and is expected to be popular with the baby boomer crowd, Wright said.
Interest in Fuchs' development should boost Ka Milo's market, he said.
"Any activity is good activity," Wright said, adding that he's already fielded many sales inquiries about the project.
The tremendous amount of market activity at Mauna Lani is in response to the demand which is driven by second-home buyers from the West Coast, Wright said.
"It has what those second-home buyers are looking for -- white sand beaches, golf courses, great weather and it's still fairly attractive from a pricing standpoint."
In recent years, real estate values have soared on the Big Island, which is still considered by many to be the most reasonable residential market on the islands.
The median price of a single-family home on the Kohala Coast reached $745,000 in June, an 88.6 percent increase from the prior year, according to information released this week by the Hawaii Information Services.
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