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OFFERING MEMORANDUM

410 Atkinson Drive, Apt. 1A, Honolulu, HI 96814

For Sale FOUR MILLION dollars $4,000,000

This fee simple, 11,547sq. ft. building/commercial condo, in an UNBEATABLE LOCATION opposite the Convention Center, and at one corner of Ala Moana Mall, the highest grossing Mall in the Nation. is part of the Ala Moana Hotel with 1176 rooms to draw from, and featuring a 40 foot high ceiling, (it was the former Hawaiian Hut entertainment venue and Polynesian Dinner Show for 35+ years) The BMX-3 Zoning allows most business uses and even multi-family dwellings

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Contents:

THE OFFERING

Investment Summary

Investment Highlights

Locator Map

ASSET OVERVIEW

Property Description

Floor Plan

Site Plan

Condo Map showing Apt.1-A

THE MARKET

Economic Drivers:

Ala Moana/Kapiolani Corridor Overview

West Waikiki

Kakaako

FINANCIAL ANALYSIS

Comparable Sale

For Investors

[pic][pic] walkway - lobby to the space

Driveway entrance Hotel with subject to the right

INVESTMENT SUMMARY

LOCATION, LOCATION, LOCATION

This virtually freestanding commercial condo is part of the 1176 room Ala Moana Hotel condominium. The Hotel, located at one corner of the Ala Moana Shopping Mall is connected by skybridge to the Mall which is, Hawaii' s premier shopping, entertainment, and dining destination.

Ala Moana Shopping Mall is the largest outdoor shopping mall in the world and highest grossing mall in the Nation, with over 42 million visitors a year.

Two of Waikiki’s entrances are only a block away. Waikiki, with 5 million visitors per annum is serviced by a shuttle trolley between the Mall and Waikiki that goes past the subject property 7 days a week every 10 minutes.

Currently owned by Lubavitch Foundation of Hawaii and used as a synagogue

[pic][pic] Sanctuary /offices

Most business uses are allowed in this excellent BMX-3 zoning. They will benefit tremendously from the surrounding condo towers. West Waikiki is the most densely populated region in Honolulu. Similarly, they will benefit from existing and new development in the Ala Moana/ Kapiolani Corridor and the expansive development of 29 new towers in Kakaako, some 4,805 residences

The proposed Ala Moana Rail Station, that fuels the TOD development around it, and the Kapiolani Corridor are experiencing an huge hotel and condo development boom that will add more people and value to the region with 450 foot towers and includes the Mandarin Hotel, under construction right opposite the subject property.

The property’s high visibility corner location allows it to take advantage of both the visitor and local markets. Down the road is the Waikiki Yacht Club and Ala Wai Marina and Ala Moana Beach Park and Magic Island, all major attractions, as well as the expansive 200 acre+ Ala Moana Beach Park, great for picnics, and one of the most visited parks in Hawaii !

[pic] The subject from the Convention Center

INVESTMENT HIGHLIGHTS

Rare Fee Simple Opportunity

The opportunity to acquire the fee simple interest in a commercial condo with so many potential uses, though proven as and in demand as an entertainment venue, particularly in a market where leasehold interest sales transactions are commonplace and fee simple represents a very compelling investment prospect.

[pic] Reception area

[pic]below reception area

Irreplaceable Location

410 Atkinson Apt.1-A represents a truly rare opportunity to acquire a quality entertainment or other

asset in an unbeatable location,with booming development projects all around. It simply cannot be replaced or built speculatively at a cost that the leasing market can support.

[pic]entrance

Supply Constraint

Honolulu Metro is an extremely supply-constrained market. New office, retail and industrial properties are almost impossible to find, and there is currently no new supply due to high construction costs and a lack of available developable sites. However, the Transit Oriented Development within ½ mile of the proposed Ala Moana Station, planned to be two blocks from the subject property, is driving a boom in the area surrounding the property. See Exhibits 1 and 2. This boom has led to 450 foot condo and hotel towers being built and more approved and under construction, despite the high acquisition (over$600 a sq.ft. land only) and development costs that are forcing the market into higher price echelons. The subject property benefits from this dramatic increase in values.

Though proven as an entertainment venue with liquor license, with capacity seating for 399 persons and with a large kitchen, previously licensed for kosher food preparation, the zoning allows for multi-family dwellings and the space could be reconfigured potentially to create luxury apartments to take advantage of its unbeatable location and the demand for housing in the area.

[pic] [pic]

Former showroom with high ceiling and former stage

As a dinner/ showroom and/or entertainment venue, featuring its 40 foot high ceiling, the venue could fill the demand Hawaii has for adequate venues for touring musicians/artists en route to and from Asia Pacific. Also a themed attraction could fill a void for Hawaii in the dinner theater category such as the Dinner Detective franchise or a Las Vegas styled show.

OTHER HIGHLIGHTS

PARKING:

1. The property has unique access from Ala Moana Shopping Mall parking

via a skybridge on the second level connecting the Hotel and the Mall (with a vested legal easement). For 50 years this skybridge has allowed people such as conference goers to move freely between their parking at the Mall and the Hotel and hotel guests to enjoy the Mall. The subject property is a short distance down the hotel escalator and out the lobby doors.

2. The showroom’s ticket sales pricing in the past has included parking in the hotel parking garage ( some 300 stalls approx. available). An elevator takes the guests up to the lobby and then out ot the venue. This arrangement could be potentially arranged with the Hotel operator.

3. The condominium has 80 approx. parking stalls in both Kona St and Mahukona St. (dedicated for use of hotel guests and users)

4. There may also be an opportunity for valet parking with 20 stalls around the porte cochere.

LOCATOR MAP

[pic]

Unbeatable Location at Ala Moana Hotel and one corner of Ala Moana Shopping Mall, opposite Convention Center one block proximity to Waikiki

ASSET OVERVIEW

Property Description

Fee Simple 11,547 square feet building. Ideal for restaurant/ caterer, dinner/showroom, nightclub, retail, office

Location, location, location. " High profile attractive building, great exposure, high visibility corner location to take advantage of both the visitor and local markets, a block from Waikiki

Tax Map Key: (1) 2-3-38-2-1164

Zoning: BMX-3 – Business mixed Use (a wide range of possible commercial uses)

Property taxes: $ 300 per annum currently as non-profit.

Year Built: 1970, converted to condominiums in 2005

Use: Commercial use for this condo (BMX-3 zoning). The 36 storey Ala Moana Hotel use containing 1,176 hotel apts. is a grand fathered lawful non-conforming use.

Permitted Uses: Include: multi-family, medical and research labs, indoor recreation and amusement, motion picture and TV production studios, food manufacturing and processing, financial institutions, retail establishments including restaurants, convenience stores, vet establishments, catering, dance or music schools, medical clinics, business services including computer, auction, advertising , marketing , accounting, security, human resources, payroll, special needs of elderly (conditional), multi-family dwellings

AOAO fees: AOAO maintenance fees include other heads of expense such as all utilities, electricity, sewer, water, rubbish removal! (40% of Hotel’s budgeted expense estimate) And include reserves set aside for future repair and replacement as required under Hawaii condominium law. If each head of expense were allocated separately, the estimate would look something like this:

Utilities: -------- $8,000

Reserves: ------ $4,200

Other maintenance:------- $8,300 (equivalent to about $0.72 per sq. ft. per month)

Total expenses covered in AOAO fee:------ $20,500 per month.

In context, the $0.72 per sq. ft. per month estimate compares favorably with other leased commercial properties throughout Oahu. In Waikiki common area maintenance (CAM) charges and additional marketing and other charges can be nearly quadruple that, in the order of $2.80 per sq. ft. per month with electricity payable additionally.

Large kitchen (approx. 4,000 sq. ft.) has more recently been used as a kosher food preparation facility, though not currently licensed as such.

[pic] [pic]

Floor plan e[pic]

Site Plan

Showing location of subject condo in relation to Ala Moana Hotel

[pic]

Condo Map showing Apt.1-A in relation to hotel lobby 1-G, Plantation Café (1-B) and former Rumours (1-[pic]

THE MARKET

Economic Drivers:

The estimated economic impact is in the $billions, as well as nearby Kakaako which is expected to have some 29 or so new high rise towers with 5 already existing and sold out at multi-million dollar prices.

Economic impact of nearby developments

Besides the Ala Moana Rail Station proposed at Keeaumoku St with all its attendant TOD development, the following developments will bring great benefit to the Ala Moana area and to the Hawaiian Hut space, with just the first phase of one of them alone representing more than $1.25 billion in economic impact and thousands of direct and indirect jobs for Oahu



See also re One Ala Moana condo development sales at $1170/ sf. build out cost $900 /sf

This major development, right across the Hawaiian Hut’s Kona St corner, will have bring significant benefit

[pic]

Existing

Ala Moana/Kapiolani Corridor Development Boom surrounding the subject property

The “Rail condo boom” can be seen in the map below. The Ala Moana/ Kapiolani Corridor boom is fueled by the 450 foot height limit and the allowable FAR doubling as a result of the Transit Oriented Development (TOD) ordinance that allows such development within ½ mile of the proposed Ala Moana Rail Station and the proposed rail stations in the Kakaako area

Drawing from such development, the subject property is by far the best priced best located fee simple property in Honolulu at only $346/ sf. ($4 Million) for an 11,547 sf fee simple interior area. All around the subject properties are being developed and the acquisition cost (land only) exceeds $600 per sq. ft. before development.  The surrounding increase in values has affected the value of the subject property.

[pic]

Mandarin Hotel immediately across Kona St from this site is under sonstruction! Proposed 450 ft residential tower/ hotel development!

A developer recently bought the property immediately opposite subject property in Kona St  for $36 Million ( land value only--about $632 per sq.ft.)

The $510 million Sky Ala Moana condo-hotel project on Kapiolani Boulevard was approved in Nov. 2018and is expected to deliver 300 condominium hotel units and 474 condominium units priced between $650,000 to $850,000, ( 84 will be affordably priced.) The development also is expected to create up to 810 construction jobs and, upon opening, 540 permanent full-time jobs, first units to be occupied by 2023.  

Other approved developments are the proposed 450 foot residential tower by SamKoo at 1657 Kapiolani.

West Waikiki ( around the corner)

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There is also currently a robust existing local demographic in this West Waikiki area that is one of the most dense areas of Oahu and within walking distance of the subject property.  The existing condos include Yacht Harbor Towers (459 units), Atkinson Towers (111) units, Sunset Towers (81 units), Atkinson Plaza (127 units), One Ala Moana (206 units), Park Lane Ala Moana (215 units), Summer Palace (146 units).

Local target market - 2015 Population demographics for 1, 3 and 5 mile radius are: 70,002, 223,811 and 313,265 with expected 7.2 % growth up to 2020!

KAKAAKO RISING

The Ward Village- within about a mile from the subject property- has planned a total of 22 towers and Kamehameha Schools has approval for 7 towers

Eleven buildings are completed or under construction in Kakaako, a total of 4,085 units

Aalii Developer: The Howard Hughes Corp. Units: 751

Aeo Developer: The Howard Hughes Corp. Units: 466 units

Anaha Developer: The Howard Hughes Corp. Units: 318 units

The Collection Developer: Alexander & Baldwin Units: 467 units

Gateway Towers Developer: The Howard Hughes Corp. Units: 236 units

Ililani Developer: Hui O Ka La LLC Units: 430 units

Ke Kilohana Developer: The Howard Hughes Corp. Units: 424 units

400 Keawe Developer: Castle & Cooke Hawaii Units: 95 units

400 Keawe Developer: Kamehameha Schools Units: 88 units

Keauhou Place Developer: Stanford Carr Development Units: 423 units

Keauhou Lane Developer: Gerding Edlen /behalf of Kamehameha Schools Units: 209

Nohona Hale Developer: Bronx Pro Group Units: 105 units

Ola ka iLima Artspace lofts Developer: Artspace Projects Units: 84 units

801 South St. Building B Developer: Downtown Capital Units: 410 units

Waiea Developer: The Howard Hughes Corp. Units: 177 units

The Block 803 Waimanu Developer: MJF Development Units: 153 units

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FINANCIAL ANALYSIS

Comparable Sale:

The most recent comparable sale of a commercial condo was L9 at Nauru Tower on May 10, 2018 at a price of $4.6 Million for a 10,740 sq.ft. condo, being $428 per sq. ft. That compares to the subject property at $346/sq. ft.

For investors: If this property were rented out, compare rents at the Mall or in Waikiki (up to $30 per sq. ft. NNN per month with additional large CAM expenses often in excess of $2 per sq. ft. per month). The subject property enjoys all the benefits of both the Mall and Waikiki, being at one corner of the Mall and a block from Waikiki. The estimated rental value of this property is in excess of $3 per sq. ft. NNN or potential income of $415,692 per annum, giving a potential return to an investor at current pricing of 10.4% p.a for a fee simple property in such a premium location! And with the anticipated rental rates that must be generated to make the new towers around this site profitable, there is even more potential growth.

Contact: Principal Broker: William Crowe (B) RB-15415

Crowe Commercial Real Estate LLC- RB-22690

Phone: 808 396-8410,

Cell: 707-484-0640

68-155 Au St., Ste 105, Waialua HI 96791

email: williamcrowe1@

Disclaimer: Buyer should do its own analysis of the property. The information contained herein has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty, or representation about it nor as to the condition of the property. Buyer to confirm and consult with their tax, financial, legal advisors, architect, engineers, environmental consultants, zoning consultants, and other professionals and conduct its independent due diligence studies. Any projections, opinions, assumptions or estimate s used are for example only and do not represent the current or future performance of the property.

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