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The Home Stretch for the Beach Villas at Ko Olina

By
Real Estate Broker/Owner with Beach Villa Realty,LLC

 
           

Whether you are new to this string on the Beach Villas at Ko Olina or have been following it since December... welcome! In either event, it might be a good time for a review of that last year. As is the custom, if you want to read the full details, links to the earlier articles are at the end of this.

When we began this story, the Villas were about half sold and were being offered with some slight price reductions, but were essentially priced close to the prices that the first 127 units had sold for. That was December 2008. 


                  

In January 2009, Centex Destination Properties, the Developer of the Beach Villas at Ko Olina announced that they were going to have a Final sale event on June 5th and 6th with plans to sell the 120 remaining units at discounts ranging between 25% to 35% from their last published prices. Reservations were going to be taken on a priority basis with a $50,000 deposit and the selection of the units would be based on the order that your reservation was taken. During the time of this sales period, there were approximately 140 reservations taken and plans were being made for the event.

In May, it became apparent that "issues" were beginning to develop on a few fronts. The future control and ownership of several commercial apartments within the complex like the fitness center, beach bar, reception area and pools became embroiled in controversy and there was discussion as to whether the classification of the pool areas should remain as limited common areas appurtenant to the commercial apartments or if the Home Owners Association should reclassify those areas as common area and assume control of those areas. Between the existing homeowners, prospective homeowners, Centex and the Ko Olina master developer several different opinions existed and those issues are now in the process of being resolved either through mediation between the parties or if unsuccessful through that process, ultimately through litigation. 


          

At the same time, it was also expressed by the Master Developer that the right existed for them to purchase 35 units of their choice and that option was presented to Centex. Again, differences in opinions were expressed and that issue also is in the process of being resolved either through mediation or if unsuccessful through litigation. At this point, due to the uncertainty of events, the reservation holders were given the option of maintaining their reservations with the return of their $50,000 deposits and new reservation holders were given the opportunity of placing reservations without a $50,000 deposit. There was an initial attempt to hold the event in July, but due to the complications that was postponed also.

That brings us to where we are today. Since the $50,000 deposit requirement was removed in June, the number of reservations has increased from about 140 to close to 220 at last count and continues to increase daily. It was determined that due to litigation and some changes within the parking spaces assignments, that it was necessary for a new public report to be filed which was done and has now been accepted. As we sit right now, the plan is now to move forward with the sale event, irregardless of the resolution of the "issues" and with or without the 35 lowest price units depending on the resolution of those issues between now and then.

So in summary, these are the key points:

The sale event is currently anticipated in the second half of September.
The sale event may consist of 120 units starting in the $500's or it may consist 
    of 85 units starting at about $800K with the 35 units being held out of the sale.
There will be a reclassification of the limited common areas or there will not be.
Limitations will be placed on the future use of the common areas or not.
Lenders are currently in place to provide financing for the units apparently in any 
    of the above scenarios.
Prices are about to be released and appear to be closer to 30% to 45% less than the 
    last published prices depending on the units.

If the 35 units are held back from the sale, it is entirely possible that there may be in excess of 250 reservations or more for 85 units and it is impossible for me to predict how many of those reservations were hoping for the units that were anticipated being priced below $800K. My understanding is that between now and then, there is going to a refinement of the existing reservations with preapprovals being requested, level of interest being determined and units of interest being established. Packages are going to be delivered to the existing reservation holders to assist in the diligence periods including unit pricing so that by the time the sale is in process, purchasers will have a good idea of the units that are going to be available based on their reservation place and the developer will have a solid understanding of the ability of reservation holders to perform once the contractual period is entered. 

           

At this point, it seems there is still much to be answered for the event to be a true success. My hope is that as the event approaches, those answers will be resolved and that the end result is that all of the remaining units will be included in the sale. If not, it will a little harder to make a truly informed decision of price and value, but with the anticipated prices, it will also be hard to say no if given the chance to purchase the unit you want at the price you would like to pay. Time will tell and a lot can happen in 30 to 40 days when parties are motivated to do so.

If you are becoming aware of these units for the first time, I encourage you to read the links below. If you are interested in potentially forming a partnership with an existing reservation holder to increase your chance of a higher selection, there are some parties who may be interested in doing so and if you would like to discuss that as a possibility, follow this link:  Partnership opportunities .

If you are interested in an alternative ocean front property I currently have a comparable ocean front property that is fully described in this link, Kai Lani Ocean Front

Here is a link to an article that was previous to this one that also has links to all of the earlier articles. Link to earlier article

I hope you find this update interesting and hope that it increases your understanding of what is a bit of a confusing situation. If you would like some personalized or additional information, please feel free to contact me at this link: Email Michael

Look forward to hearing from you!

Aloha,



Michael Hege' RA
Kapolei Realty, Inc
(808) 225-3660
www.KapoleiToday.com
www.HomesOahuHawaii.com