November 19, 2008
Press Room
Kapolei industrial project moves ahead despite risk 
Sep 30, 2008
Kapolei industrial project moves ahead despite risk
By: Andrew Gomes
September 27, 2008
A local development firm is moving ahead with construction of a 56-lot industrial subdivision in Kapolei for fee-simple sale, at an expected cost of more than $20 million over the next year.
Lokahi Ventures LLC has begun some grading work, and plans to hold a ceremonial groundbreaking and blessing Tuesday for Kapolei Business Park Phase 2A.
The company, led by local resident Paul Lambert, expects to complete the project by the end of next year after investing at least $20 million to develop the 54-acre property with roads, sewers, water, streetlights and landscaping.
Lokahi Ventures has been marketing the lots for sale for about two months, and has nonbinding purchase commitments for 12 lots, according to Scott Mitchell, an agent with local commercial real estate firm Colliers Monroe Friedlander handling project sales.
Mitchell said that despite the financial crisis battering the national and local economies, many companies are looking to improve or expand their business in ways that involve investing money in operations.
However, as Hawai'i's economy has slowed, demand for industrial property has softened as business slows in construction and other industries that need warehouse space.
Colliers recently reported that vacant warehouse space on O'ahu grew by 372,563 square feet — a little more than the equivalent of two Wal-Mart stores — in the first half of this year, as tenants vacated space or new available space was added to the market.
Still, the vacancy rate, which rose from 3 percent at the end of last year to 4 percent at the end of June, remained relatively low. A 6 percent to 8 percent range is considered to be a balance of supply and demand.
"I think the interest is good," Mitchell said of the Kapolei project, adding that nearly all of the tentative land purchases involve companies planning to get out of industrial property leases in urban Honolulu in favor of owning property farther from the urban core.
Asking prices for the lots, which range from about a half acre to 1.8 acres, vary from $42 to $44 a square foot, or roughly $915,000 to $3.4 million.
The project is adjacent to an earlier phase of Kapolei Business Park, which features larger lots occupied by such tenants as Hoku Scientific, Longs Drug Stores, Goodwill Industries of Hawai'i and the Hawai'i Carpenters Union.
Lokahi Ventures bought the 54-acre Phase 2A parcel in 2005 for $22 million, two months after another developer, California-based Jupiter Holdings LLC, purchased the parcel for $10 million from the Campbell Estate (now known as the James Campbell Co.). Lokahi Ventures was formed about eight years ago, and also developed Wailea Beach Villas, a 98-unit luxury vacation condominium project on Maui where units initially went for roughly $1 million to $5 million about five years ago.
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Kapolei's development has a second-city look
Aug 29, 2008
Kapolei’s development has a second-city look
August 22, 2008
Kapolei’s urban core is taking shape as a second city, with tens of thousands of square feet of new office and retail space to be built in the next 10 years.
Just eight parcels of land, less than 35 acres, are unspoken for in the City of Kapolei, according to officials with the James Campbell Co., which as The Estate of James Campbell began master-planning Oahu’s second city some two decades ago.
Several large projects are under construction, including Kapolei Commons, the Kapolei Judiciary Complex and Costco. More are due to start within the next year, including two office-retail buildings and a retail shopping village. A Wal-Mart store also is planned for a 25-acre parcel near the H-1 freeway entrance at the corner of Farrington Highway and Fort Barrett Road.
Creating jobs
“At the core of all of it is really job creation,” said Brad Myers, president of Kapolei Property Development Co., one of the former estate’s real estate arms. “For every job we create, that’s a car off the freeway.”
Of the projects on the boards, the first phase of the Kapolei Pacific Center, Avalon Development Co.’s office and retail project, likely will be the first to break ground this fall.
The project was recently redesigned for value engineering to mitigate cost increases, said Christine Camp, president and CEO of Avalon Development Co. The first building will be 40,000 square feet, with retail on the first floor, retail and offices on the second floor, and topped by a floor of office space, mostly for smaller users, she said.
“It’s slightly delayed, like a lot of projects,” Camp said. “The leasing is still pretty strong. We have very good interest from our initial targets.”
The four-building project will be built in four phases on three acres adjacent to the Kapolei Library along Manawai Street that Avalon bought for $6.7 million in December 2006. Avalon also is buying for an undisclosed price a 2.7-acre parcel that is zoned for business-mixed use adjacent to the Kapolei Pacific Center property.
Nearby, Maryl Group hopes to break ground on the first phase of its office-retail project, on three acres diagonally across from the state office building.
“We’ve recently reconfigured our development plan and we have scheduled now a phased multibuilding program up to 10 stories,” Maryl Group President Mark Richards said. “It would be taller than anything that’s there today.”
Each building will be between eight and 10 stories tall, with up to about 60,000 square feet of ground-floor retail and restaurant space topped by approximately 360,000 square feet of office space, he said.
The first building is in the design phase, and preleasing already has started, but no start date has been determined. Timing for the second and third phases will depend on demand, Richards said.
A third office project, which was to have been built by California-based Kahl and Goveia on three acres behind Island Pacific Academy, has been scrapped, and the land is back on the market.
Foodland Super Market plans to start construction early next year of its new store and shopping village on four acres along a yet-unbuilt stretch of Kapolei Parkway. The site of the 56,320-square-foot Kapolei Village Center is across from a half-dozen mixed-use parcels that are under negotiation, and which border D.R. Horton’s planned Mehana at Kapolei residential project.
More homes and jobs
The James Campbell Co. is working on three future projects that also will enhance the second city — the Kapolei Harborside Industrial Park, the Kapolei West residential and retail project and the Makaiwa Hills residential project. Combined, the three developments will add 6,500 homes and more than 7,000 jobs to the area.
In the meantime, the company is working on building out some $180 million in roads and other infrastructure by 2010 so that the planned projects can proceed on schedule, Myers said.
“It’s a pretty large undertaking,” he said. “I think it’s the largest private-sector [funded] public infrastructure initiative that I’ve ever heard about [in Hawaii].”
Press Archive
Kapolei industrial project moves ahead despite risk
Kapolei's development has a second-city look
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Retail boosts Kapolei's economic growth
Drivers' help needed on Kapolei roadwork
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Disclaimer © 2008 Colliers Monroe Friedlander, Inc. All Rights Reserved. Any unauthorized copying, distribution or adaptation is strictly prohibited and will result in liability of up to $150,000.
