1192 ALAKEA STREET. Honolulu CBD Development Opportunity. OFFERING MEMORANDUM

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1 1192 ALAKEA STREET Honolulu CBD Development Opportunity OFFERING MEMORANDUM

2 Executive Summary The site at 1192 Alakea Street offers a rare opportunity to construct a dense high-rise infill development in Honolulu s land-constrained Central Business District. In a marketplace with high barriers to entry and limited parking, this property offers significant optionality from a 327 stall parking garage to residential, hotel, office, or retail uses. OFFERING HIGHLIGHTS 0.30 acres / 12,842 Square Feet 7.5 maximum FAR with Open Space Bonus Currently 38 space parking lot leased at $19,000/month Plans for 327 stall parking garage BMX-4 Zoning allows residential, hotel, office, and retail uses Honolulu CBD location 1 block from State Capitol PROPERTY DETAILS ADDRESS: 1192 Alakea Street, Honolulu, HI TMK: :000 SIZE: 0.30 Acres / 12,842 CONFIGURATION: Level, corner site ACCESS: UTILITIES: CURRENT USE: One point of ingress/egress on Alakea Street All utilities are believed to be available at the site 38 space parking lot leased to operator ENTITLEMENTS: No entitlements are in place; however, plans were completed for a 12 story, 327 stall parking garage SURROUNDING DEVELOPMENTS: Pinnacle Honolulu: Adjacent to Northwest. 36 floors, high-end residential condo units built in Capital Place: Across street to Northeast. 39 floors, 394 units, 396 feet tall, built in Hawaiian Telecom (HTI): Adjacent to West. Office building, approximately 250 feet tall. District Court of the State of Hawaii: Across street to South. State of Hawaii Capital: One block to South Alakea Street

3 Development Parking Lease Potential Terms PARKING LEASE TERMS OVERVIEW: The subject parking lot benefits from a favorable lease arrangement that can provide a developer with in-place income during the entitlement process TENANT: United Parking Services, LLC ORIGINAL EFFECTIVE DATE: December 15, 2007 EXTENSION DATE: February 1, 2017 EXPIRATION: January 31, 2019 BASE RENT: Annual rent is $228,000 + Hawaii General Excise Tax (GET), paid monthly PERCENTAGE RENT: 50% of Gross Parking Revenue above $300,000 per lease year EXTENSION OPTION: PREMISES: LANDLORD RESPONSIBILITIES: One 24 month extension is available with a rental rate of $252,000 per year, paid monthly Excludes 12 striped spaces used by Hawaii Telecom as part of the agreement described later in this Offering Memorandum Capital improvements and property taxes (reported at $47,772 in 2016) 1192 Alakea Street 1192 Alakea Street 3

4 Locator Map Alakea Street

5 Development Potential DEVELOPMENT CRITERIA POTENTIAL BUILDING MASSING ZONING: BMX-4 Central Business Mixed Use. The property is within the Transit Oriented Development (TOD) Plan. ALLOWED USES: HEIGHT: SETBACKS: Multi-family residential (for sale or rent), hotel, office, various retail, parking, and other uses 400 feet Front: 5 feet / Side & Rear: 0 feet PARKING: Dwellings (600 SF or less) 1 per unit + 1 guest per 10 units + 1 loading stall for 20 to 150 units / Boarding Facilities per unit FAR: 4.0 base FAR; 7.5 maximum with Open Space Bonus TOTAL BUILDABLE AREA: OPEN SPACE REQUIRED TO ACHIEVE BONUS: 51,368 SF (96,315 SF with Open Space Bonus) 4,495 SF TOD PLAN: Allows for a reduction in required parking, provides for flexibility in type of Open Space provided, and requires building façade and fenestration designs that enhance the pedestrian experience. LOCAL ARCHITECT & PLANNING CONTACT: William A. Brizee 733 Bishop Street, Suite 3100 Honolulu, HI bbrizee@ahl.design 1192 Alakea Street 5

6 Development Potential DEVELOPMENT OPTIONS Potential Building Design Per Zoning RESIDENTIAL CONDOMINIUMS: 2016 saw a record high Oahu condominium market. The median sale price was $390,000, a 20% increase from the previous high of $325,000 in 2007 & Additionally, the supply of available new and resale homes in Oahu continues to shrink, putting continued upward pressure on values. Additionally, many West Coast major metropolitan markets have seen median values grow at a faster rate, suggesting Oahu will remain an attractive market and may perhaps even be undervalued. 400 Max Height FOR-RENT MULTI-FAMILY: Rental rates for A and B product in the Honolulu market are currently averaging above $2.25/SF, up almost 20% from 5 years ago. With declining construction starts, decreasing inventory and vacancy rates around 3.7% for the submarket, rents are likely to continue trending upward. HOTEL: The only hotel option in Downtown Honolulu is Aston at the Executive Centre Hotel, a mixed-use condominium hotel developed in With approximately 90 rooms starting at $209 per night, the market appears to be under-served. Building Envelope STUDENT HOUSING: Hawaii Pacific University has a current enrollment of over 6,700 students spread across 3 campuses, including the nearby Downtown campus, with less than 300 rooms. The University of Hawaii at Manoa, has approximately 20,000 students currently enrolled. With limited on- and off-campus housing offering modern amenities, developers have a substantial opportunity to capture the growing demand. Property Line ALAKEA ST. BERETANIA ST Alakea Street

7 Development Potential HAWAII TELECOM AGREEMENT The property is subject to an agreement with Hawaii Telecom (HTI) for the purpose of protecting Potential Building Design with HTI Agreement In Place telecom infrastructure on their adjacent building. This agreement has the following key criteria: The foundation or structure of any building construction on the subject site cannot touch the foundation or building of the adjacent HTI building. Additionally the wall facing the HTI building must be solid. HTI has the right to buy 30 parking spaces in any proposed development on the subject site for $1,000,000. The height of a development on the subject site is limited to 240 feet to prevent interference with HTI s rooftop transmission equipment. The agreement with HTI substantially limits the potential FAR of the property; however, based on preliminary conversations with HTI, Seller believes that the agreement could be amended to remove the 240 foot height limit if the developer agrees to relocate the telecom equipment onto the roof of the new structure. Additionally, the City s TOD director has expressed a willingness to assist with this effort as they would like to see a 400 foot tower developed at the site Alakea Street 1192 Alakea Street 7

8 Aerial Map Waikiki Beach Ward Village Development University of Hawaii Manoa Kaka Ako Development Hawaii State Capital Hawaii Pacific University 1192 Alakea Street Alakea Street

9 Tax Map Alakea Street 9

10 Terms: Property is offered unpriced. Please submit propsals to listing agent. Due Diligence: Please visit to download additional information about this opportunity. Debt & Equity: Available via Ben Schwartz of Cushman & Wakefield at BROKER CONTACT INFORMATION: S. STEVEN SOFOS, (B) CPM 600 Kapiolani Boulevard, Suite 200 Honolulu, HI ADVISORY SERVICES PROVIDED BY: THE LAND GROUP Cushman & Wakefield of San Diego, Inc. CA License #