Big Kapolei parcel goes back on the market
A developer has put 54 acres of industrial land that was to become the second phase of Kapolei Business Park back on the market instead of subdividing it into smaller parcels for sale.
Kapolei Business Park Phase II is being offered by Eastdil Secured for an undisclosed price.
It is the largest single piece of industrial zoned land left for sale in West Oahu. A 100-acre property across Kalaeloa Boulevard was purchased last year for $78.5 million from the Campbell Estate by a Los Angeles developer, and the 65.8-acre former Hawaii Raceway Park land was purchased from Campbell for $13.2 million.
Lokahi Ventures purchased Kapolei Business Park Phase II land two years ago for $22.5 million. The land is situated along Kalaeloa Boulevard between Kapolei Business Park Phase I and the old racetrack.
Guy Kidder, the broker who sold the land to Lokahi in 2005 and is assisting with the sale now, said that instead of going through the process of building infrastructure and subdividing the land, the developer decided to sell the whole thing for a profit.
"The land values have gone up; the big profit is in selling the land," said Kidder, a vice president at Colliers Monroe Friedlander who also handled sales for the sold-out Kapolei Business Park Phase I.
Oahu's industrial vacancy rate at the end of 2006 was 2.28 percent, according to research by Colliers Monroe Friedlander, which also found that prices for industrial land in Kapolei increased 150 percent between 2004 and the end of last year. Construction costs, meanwhile, rose 23 percent, according to the Colliers year-end industrial report.
The tight space likely attracted developers such as SHM Partners, which bought the 100-acre industrial parcel, and Irongate, the company that bought the old racetrack and also is developing the Trump International Hotel & Tower Waikiki Beach Walk.
SHM, which partnered with Morgan Stanley on the deal, plans to develop the land as a business industrial park. Adjacent to that parcel is 345 acres of land owned by the James Campbell Co., which plans to develop it into another large industrial park called Kapolei Harborside.
Irongate also plans to turn the old racetrack into an industrial park of nearly 100 fee-simple lots.
However, the Irongate land, as well as the land under the proposed Kapolei Harborside, is zoned for agriculture, so both companies must go through the rezoning process to allow industrial use.
The marketing materials for the 54 acres of Kapolei Business Park Phase II notes that fact, saying, "Hawaii's lengthy entitlement process should keep competition to a minimum during a time when demand is peaking for industrial space alternatives."