Hawaii commercial investment sales volume drops 61% in 1st half of 2020

Original Article

Commercial real estate investment in Hawaii dropped in the second quarter as the Covid-19 pandemic and the ensuing recession slowed U.S. investment and put a halt to foreign activity, according to Colliers International Hawaii’s investment market report for the second quarter.

Total sales volume for the first half of 2020 dropped 60.7% to $507.4 million, from $1.29 billion during the same period in 2019. The number of sales during the first two quarters declined 31.8% to 92 transactions, from 135 transactions during the same period in 2019.

Colliers forecasts investment sales volume will likely fall to or below $1 billion for the first time in eight years and expects that by the end of the year sales volume will drop 60% from 2019 levels and the total number of transactions will fall by 52%.

Hawaii fared better in the first half than the national commercial real estate market, which saw a 68% drop in sales volume and 62% drop in number of transactions.

One of the factors affecting the Hawaii market was the absence of megadeals, transactions of $100 million or more, during the first half of the year. In 2019, there were three megadeals that closed for a total of $454 million, while in the first half of 2018 — a year of record deals — there were seven megadeals totaling $2.4 billion.

The largest transaction during the first half was ACP Waikiki Holdings LLC’s Jan. 9 acquisition of the vacant King Kalakaua Plaza in Waikiki for $75 million from an entity owned by Woodridge Capital Partners. ACP Waikiki Holdings is an affiliate of Athos Capital Partners, which partnered with Marriott Vacations Worldwide to redevelop the building into a seven-story timeshare.

So far in 2020, there has been only one megadeal, and that happened in the third quarter — Amazon.com’s $125 million purchase of a 14.45-acre site near Honolulu Harbor from Servco Pacific Inc., which closed on July 15.

Hotel and resort transactions, which can account for more than 50% of sales volume in Hawaii, were absent from this year’s numbers — there were no hotel transactions recorded during the first half of this year.

Colliers noted that until 2018, foreign investors from Japan, Korea, China, Australia, Singapore and even Germany had invested hundreds of millions of dollars in Hawaii real estate.

That began to drop off last year — through June 30, 2019, there was a total of $20.42 million invested by foreign entities — and this year, through June, that plummeted to only three foreign transactions for a total of $8.3 million.

However, local investors in Hawaii have been active this year, accounting for 80.5% of the total sales volume, or $408.5 million, and 85%, or 78, of the number of transactions.

Colliers noted that local investors typically buy properties priced under $10 million. During the first half of the year, only nine of the 92 transactions recorded from January to June were for $10 million or more, which meant the number of transactions for less than $10 million rose to 90.32% from 88.25% over the last year. That contributed to the drop in average transaction size to $5.5 million in the first half of 2020 from a record $26.41 million at mid-year 2018, a drop of 79.1%.








上半期の最高額案件は、ACP Waikiki Holdings LLCがWoodridge Capital Partnersの所有する企業から、空きビル状態であったワイキキのキング・カラカウア・プラザを1月9日に7500万ドルで買収した案件だ。ACP Waikiki Holdings LLCはAthos Capital Partnersの関連会社であり、マリオット・バケーションズ・ワールドワイドと提携して、同物件を7階建てのタイムシェアに再開発する。

2020年の超大型物件は今のところ第3四半期に成約した1件のみだ。Amazon.comがServco Pacific, Inc.から、ホノルルハーバーに隣接する14.45エーカーの土地を7月15日に1億2500万ドルで購入した案件だ。