Kamehameha Schools Strategic Plan & Real Estate
What is Kamehameha Schools up to? As the Chair of Honolulu Board of Realtors East Oahu Region I was fortunate enough to secure Mr. Walter Thoemmes, Kamehameha Schools Managing Director of Commercial Real Estate as one of our monthly guest speakers for our members.
The focus was Kamehameha Schools Strategic Plan and Real Estate Strategy. I knew very little and was blown away with all they openly shared. I thought, regardless on if you are in real estate or even interested in real estate, this pertinent information was relevant to anyone tied to Hawaii as a resident or visitor.
Smart Living Hawaii’s mission is to support Hawaii’s future through sustainable awareness, business advocacy and healthy living. So featuring Kamehameha Schools and their future endeavors only seemed appropriate. What Kamehameha Schools (KS) is now trying to accomplish with its land and resources is very much in line with Hawaii’s future for the greater good and its people. They aren’t giving things away or being frivolous with their assets but being smart. The land they do sell won’t be cheap but they feel fair. The partnerships they create to execute projects are assessed and some will be handed off to third parties while others make more sense to execute on their own. They weigh all options and move forward with things that fit their vision. They want to manage their portfolio to be as profitable as possible for its mission of creating educational opportunities in perpetuity to improve the capability and well-being of people of Hawaiian ancestry. But they also see how what they do to accomplish this mission can positively affect Hawaii as a whole because of their wealth, resources and influence on our state. To see their proposed transformation over the next decade will be a sight to see and if executed properly, a promising future for the land they have been entrusted in.
I know you’re itching at the bit to know what these plans are so here is my shortened version of their strategic plan...so, did you know that KS owns 363,000 acres of land across Hawaii? I know that sounds like a lot but only 15,000 acres is commercial acreage and of that, less than 1000 acres are productive commercial space. The remainder of these plans really focus on those 1000 acres here on Oahu. The land they are incorporating into their strategic plan are in these neighborhoods: Kaka'ako, Kapalama Kai, Mo'ili'ili, Kahala, Waiawa, Waipahu and Ka'onohi.
Kaka'ako has gone through their first phase of building what you see now on the retail front (Our Kaka'ako: SALT) and also including the residential buildings: The Collection, Keauhou Place, 400 Keawe, 680 Ala Moana and 440 Keawe. Phase two is next and they are close to securing Block C for the next high-rise project. They are now focusing on keeping and managing the commercial spaces at the bottom of these high-rises and selling the high-rise space to a developer. Keauhou Place is the perfect example of what they see themselves replicating. They didn't build or sell out the units to Keauhou Place, they sold it to one developer and just focused on the reserved housing apartments and commercial space at the street level of the high-rise called Keauhou Lane. There are 5 more blocks left including Block C and in time they will decide how those will be developed. It is all based on supply and demand, so those blocks could stay empty for quite some time, you just never know.
Another big project is Kapalama Kai (105 acres) located in Kalihi-Dillingham area. For those who aren't as knowledgeable about KS's land and ownership, they have a lot of ground leases on their acreage. These leases are coming due soon and KS has plans to take them back and revise the way the land has been used. Some plans for Kapalama Kai will be consolidating the smaller parcels together to make larger parcels. Also since they are close to the ports, industrial will still be a main focus. They plan to do multi-story light industrial versus the current single level industrial and then build housing above. This will hopefully bring in thousands of housing units to our urban core and increase industrial square footage that we so desperately need.
Mo'ili'ili's land owned by KS (About 4.5 acres) is prime college town real estate. It is very close to the University of Hawaii, Manoa campus. For a more recognized location, the circular Varsity Building in Puck's Alley area sits on their land. This land has a lot of potential for redevelopment and will be a large project. I can see them partnering with third parties to accomplish some of their goals here. No further information was released but they do want to provide a revitalized community where their Native Hawaiian students and other students can advance their education through the UH experience.
Kahala has two locations with new developments taking place. One was the new McDonalds complex and adjoining restaurants and the other is Kuono Marketplace at Kahala. They were able to consolidate smaller parcels after the ground leases were due to make one large parcel with a cohesive center. They plan to have Foodland as their anchor grocery store, a gas station and other retailers that fit the active and healthy lifestyles of Kahala residents and patrons. Many wonder about 4999 Kahala Avenue located between Waialae Country Club and The Kahala Hotel. These ground leases expire at the end of 2027 and KS plans to take them back as well due to the prime ocean frontage and desirable location. No extensive details have been released yet but they do have some time.
Moving west there is Ka'onohi area, basically Pearlridge Shopping Center, the adjoining watercress farm and additional land down to Pearl Harbor bay. They don't have plans to do much on this property for a while but there is a lot of potential for redevelopment. Down the road is Waiawa which is located by Pearl Highlands (Sam's Club/24 Hour Fitness). This location is close to Leeward Community College, Waikele and the highly anticipated Koa Ridge off the H2. They have housing plans very soon for the lower portion of this land and excited to hear more about this soon! Also close by is their Waipahu location (about 3.8 acres) where they plan to develop rental housing.
Excited to see their community developments and revitalization plans executed. What KS is doing and the shift in strategy is looking like a big win for Hawaii! We will keep tabs on things and update you on the exciting mile-markers.