Comparing PV to Hawaii’s market

The following article appeared in Business Week, discussing the Trump Tower project in Hawaii.

Three years ago, real estate, tourism and Donald Trump were soaring to new heights in Hawaii.

Some 1,600 potential buyers from across the globe put down $20,000 deposits for an opportunity to reserve units in the celebrity tycoon’s first condominium-hotel in the islands. In eight euphoric hours, all 463 suites in Trump International Hotel & Tower Waikiki Beach Walk were sold for an average $1.5 million. Hundreds were placed on a waiting list.

Today, Hawaii’s real estate values are faltering and several other Trump-branded projects around the world are in trouble, but his Trump Waikiki tower appears to be withstanding the downward spiral.

The lowest-priced unit is a 355-square-foot, furnished studio on the 20th floor for $750,000, with a $542 monthly maintenance fee. The highest priced is a 1,660-square-foot, two-bedroom, 35th-floor unit with sweeping ocean views. It was listed for $4.5 million by Hawaiian Joy Realty LLC.

Get that? The lowest priced unit has only 355 square-feet and its $750,000 USD. For that price you can get a 3+ bedroom unit with 3,550 (or ten times the space) in Punta Mita. Not oceanfront, but oceanview. And for the most expensive? We’ve barely been able to break the $2 million-dollar market (and that was a year ago – not today) for an oceanfront unit at Hacienda de Mita, penthouse unit, more than twice the size. Is the Trump name worth that much or are these real-time prices in Hawaii?

Meanwhile, plans for similar Trump-branded condotels stretching from Mexico to Tampa, Fla., have been scrapped and are mired in legal battles. Buyers at the failed Trump Ocean Resort Baja sued Trump and Irongate in March for deposits totaling between $18 million and $20 million after they were told there was no money left to refund deposits. Trump, in turn, filed a $40 million lawsuit last month against Irongate, accusing the developer of failing to build the five-star resort.

Fortunately we weren’t so fortunate to have Mr. Trump in our marketplace!

In Waikiki, no buyers have dropped out — remarkable considering the severe shifts in the economy, real estate, tourism and lending. “There’s been no cancellations. The developer has no inventory,” Herkenrath said. “Every one of the suites is in firm-and-binding contracts.” A major disincentive of canceling is the 20 percent deposit that buyers risk forfeiting. At an average $1.5 million per unit, the average deposit was $300,000.

That sounds like a good enough reason for me to stick with the deal…

The 350-foot tower is located steps from the sand and Fort DeRussy Park in a revitalized area known as Waikiki Beach Walk. It features a library, wine cellar and a spa, along with 24-hour room, valet and concierge services. The fully furnished suites, which have views of the Pacific and the Honolulu skyline, feature everything from high-end appliances to Italian marble counters.

“Just steps away”? Isn’t that real estate talk for, it isn’t located on the beach? I checked out the website, this project isn’t on the beach. $4.5 million and you aren’t on the beach.

Kathleen Kagawa, who helped broker the sales of 25 units, said some of her clients have expressed concerns because of the economy, but the development remains attractive because, unlike most Waikiki properties near the beach, the purchase includes ownership of the land.

“So everyone’s pretty bullish and pleased,” said Kagawa, president of Hawaii 5-0 Properties. “The high-end luxury market has been affected to a certain degree, but it hasn’t been dramatic. I think that there’s still people that want to come to Hawaii, and want the best.”

“Pretty bullish”? I just checked out the March MLS numbers for Maui (yes, I know, this project is in Waikiki, but I only have Maui numbers), and sales are down 48% YTD and sales prices are down 39%. They were similar for January and February. Bullish?

Three years ago, real estate, tourism and Donald Trump were soaring to new heights in Hawaii.
Some 1,600 potential buyers from across the globe put down $20,000 deposits for an opportunity to reserve units in the celebrity tycoon’s first condominium-hotel in the islands. In eight euphoric hours, all 463 suites in Trump International Hotel & Tower Waikiki Beach Walk were sold for an average $1.5 million. Hundreds were placed on a waiting list.
Today, Hawaii’s real estate values are faltering and several other Trump-branded projects around the world are in trouble, but his Trump Waikiki tower appears to be withstanding the downward spiral.
The lowest-priced unit is a 355-square-foot, furnished studio on the 20th floor for $750,000, with a $542 monthly maintenance fee. The highest priced is a 1,660-square-foot, two-bedroom, 35th-floor unit with sweeping ocean views. It was listed for $4.5 million by Hawaiian Joy Realty LLC.
Get that? The lowest priced unit has only 355 square-feet and its $750,000 USD. For that price you can get a 3+ bedroom unit with 3,550 (or ten times the space) in Punta Mita. Not oceanfront, but oceanview. And for the most expensive? We’ve barely been able to break the $2 million-dollar market (and that was a year ago – not today) for an oceanfront unit at Hacienda de Mita, penthouse unit, more than twice the size. Is the Trump name worth that much or are these real-time prices in Hawaii?
Meanwhile, plans for similar Trump-branded condotels stretching from Mexico to Tampa, Fla., have been scrapped and are mired in legal battles. Buyers at the failed Trump Ocean Resort Baja sued Trump and Irongate in March for deposits totaling between $18 million and $20 million after they were told there was no money left to refund deposits. Trump, in turn, filed a $40 million lawsuit last month against Irongate, accusing the developer of failing to build the five-star resort.
Fortunately we weren’t so fortunate to have Mr. Trump in our marketplace!
In Waikiki, no buyers have dropped out — remarkable considering the severe shifts in the economy, real estate, tourism and lending. “There’s been no cancellations. The developer has no inventory,” Herkenrath said. “Every one of the suites is in firm-and-binding contracts.” A major disincentive of canceling is the 20 percent deposit that buyers risk forfeiting. At an average $1.5 million per unit, the average deposit was $300,000.
That sounds like a good enough reason for me to stick with the deal…
The 350-foot tower is located steps from the sand and Fort DeRussy Park in a revitalized area known as Waikiki Beach Walk. It features a library, wine cellar and a spa, along with 24-hour room, valet and concierge services. The fully furnished suites, which have views of the Pacific and the Honolulu skyline, feature everything from high-end appliances to Italian marble counters.
“Just steps away”? Isn’t that real estate talk for, it isn’t located on the beach? I checked out the website, this project isn’t on the beach. $4.5 million and you aren’t on the beach.
Kathleen Kagawa, who helped broker the sales of 25 units, said some of her clients have expressed concerns because of the economy, but the development remains attractive because, unlike most Waikiki properties near the beach, the purchase includes ownership of the land.
“So everyone’s pretty bullish and pleased,” said Kagawa, president of Hawaii 5-0 Properties. “The high-end luxury market has been affected to a certain degree, but it hasn’t been dramatic. I think that there’s still people that want to come to Hawaii, and want the best.”
“Pretty bullish”? I just checked out the March MLS numbers for Maui (yes, I know, this project is in Waikiki, but I only have Maui numbers), and sales are down 48% YTD and sales prices are down 39%. They were similar for January and February. Bullish?
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