CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM Residential sales have slowed generally, but there seems to be a lot of interest in condominiums in Kakaako. The new Moana Pacific project, on Kapiolani Boulevard between Piikoi and Pensacola streets, has 720 units in its twin towers, with some already up for resale by the original buyers. CLICK FOR LARGE

Kakaako condo buyers look for quick resales

Investors bank on demand remaining strong in the district

Just a week after buyers at the Moana Pacific condominium got their keys, about 20 of the first 360 units are back on the market for between $589,000 to $1 million.

While such sales -- known in the business as "flips" -- are not uncommon for new buildings, the recent listings come against the backdrop of a changing real estate market.

When buyers camped out in front of the sales office and lined up to buy them back in 2004, one-bedrooms started at $310,000, while 2-bedrooms started at $550,000.

Now Marshall C. Mower, a Realtor and partner at Prudential Locations, is listing a 2-bedroom unit at the Moana Pacific for $825,000.

Mower says his client, the seller, is relocating jobs, so the unit is not technically a "flip" -- a unit in which investors buy, turn around and sell instantly for a higher price.

But he's already been showing the condo to potential buyers after just listing it a week ago.

"This appeals to anyone who wants to live in the Kakaako community," said Mower, a Kakaako specialist, "and who wants to be close to the restaurants, beach and shopping. It's a very convenient location."

Phil Uehisa of Century 21 All Islands, is banking on a flip. He and an investment partner bought a two-bedroom on the 35th floor of the Moana Pacific. They bought it early, and plan to put it on the market for a higher price, in hopes of commanding at least 30 percent more.

Despite a slowing residential real estate market, Kakaako condos are still moving, according to Sachi Braden of Sachi Hawaii Pacific Century Properties.

It's more a matter of what particular unit is available, for how much, and when, she said.

It remains to be seen how well units at the Moana Pacific, developed by Silicon Valley entrepreneurs Fred and Annie Chan of KC Rainbow Development, will do. With a total of 720 new condominiums in twin oval towers, it is one of the largest offerings in Kakaako.

Braden says as a result of all the new projects, units at the Hawaiki Tower are again in high demand. Though it is an older building, she said, it offers comparable views of Magic Island and more square footage for a lower price and maintenance fee.

Braden said she just closed on a two-bedroom in the tower for $775,000.

Mower believes the Moana Pacific condos have a broad international appeal, and will generate interest from empty nesters looking to downsize and move closer to town.

Meanwhile, more than 30 condos at the Koolani are on the market for between $775,000 and $3.4 million. Many have been listed more than 200 days.

A dozen condos at the Hokua at 1288 Ala Moana, the first project to rise in Kakaako, are also on the market for between $1.78 million and $4.3 million.

Slower overall market

CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM The Moana Pacific is barely open and already some of its units are up for resale. Above, real estate agent Marshall Mower, right, of Prudential Locations on Monday showed a unit he has listed. With him was Michael Y. Koyama, another Prudential agent. Behind them are five condos in the same area: from left, the Hawaiki, 1350 Ala Moana, Nauru Tower, Hokua and the Koolani condominiums. CLICK FOR LARGE

Unlike the Hokua, where investors were able to line up buyers the same day they closed on their units early last year, doubling their money, the market into which Moana Pacific emerged is different.

Down the street, Posec Hawaii is completing 909 Kapiolani Condominiums, while just a few blocks away, A&B Properties is building Keola Lai.

In downtown Honolulu, two more high-rises condominiums, Capitol Place and Pinnacle Honolulu, are also under construction.

The timing of the Hokua's offering worked well, according to Braden. But the market was just turning when the condos at Koolani closed in March of last year, about two months after the Hokua.

"People now get to choose," said Braden. "It is a buyer's market, no doubt about it. From now on, people aren't going to go crazy about a brand new building without knowing what it is."

Not all of the first buyers at the Moana Pacific have closed yet.

Allen Leong, KC Rainbow's director of operations, estimates about 75 percent of the buyers in the West Tower, which offers about 360 units, have closed escrow. Other buyers have special requests, or are waiting for the paperwork on 1031 exchanges.

Some 40 buyers canceled their purchases while they were still able to. These units will go back to the owner and developer, Fred Chan, who will most likely keep the units as investments, he said.

Half of the units were offered to owner-occupants, some of whom sign an agreement not to sell their properties for a year. Typically, about 20 percent of any new condominium project goes to investors.

Leong said it's not uncommon for buyers to change their minds.

"It takes so long for a project to come to fruition," he said. "A lot of life changes can happen."

CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM Shown here is the kitchen area in a 25th floor Moana Pacific unit. CLICK FOR LARGE

The units in the East Tower -- another 360 -- should close in March.

Still optimistic

Realtors are still optimistic about the market for new condominiums in Kakaako.

Nathalie Mullinix of Nathalie Mullinix Realty Universal Inc.* said the urban mix of retail and residential in Kakaako appeals to mainland buyers, who are seeking convenience.

'We're still seeing a lot of mainland buyers," she said. "We're still getting the tail end of the 1031 exchanges."

She said units at the Moana Pacific are priced competitively with other projects when considering the size and amenities. She considers it a safe buy.

Leong says Moana Pacific was marketed as a mid-luxury project, unlike high-end projects like the Hokua and Koolani, and priced accordingly.

"I would like people to move in here and feel at the end of the day, that they got value for their investment," said Leong. "The goal was to keep the prices low while offering amenities that people are going to use, not to hype the project. We weren't planning to go over the top."

Moana Pacific aimed to keep maintenance fees low -- current rates range between $279 for a one-bedroom to $465 for a two-bedroom.

Moana Pacific will offer two tennis courts, a swimming pool, BBQ areas, a theater room and fitness center, but artificial turf instead of real grass in some areas to keep maintenance costs down.

The recreation deck should be completed by the end of the month, said Leong.