248 Waikiki units sell out in hours

[urbanguy]

The market for condominium-hotels in Waikiki continues to sizzle, with the latest such development on Ala Moana Boulevard selling out all 248 units in nine hours.

Demand for the studio and one-bedroom units at the Palms at Waikiki was so strong that contracts were signed on all of the units Friday and Saturday during a special "pre-sale" offering to preferred customers.

That meant that several thousand prospective buyers who lined up early Sunday morning for the official launch of the project had to settle for being put on a backup list. Prices for the fee-simple units ranged from $116,000 to $225,000.

"It was pretty amazing," said Joyce Timpson, spokeswoman for the Palm's owner, California-based LaeRoc Partners. "We had thousands of people come through."

The buyers, many of whom were investors, were split roughly 50-50 between local residents and Mainlanders, Timpson said.

The buyers who signed contracts during the pre-sale period included customers who had a relationship with the developer, and those whose brokers registered in advance with Coldwell Banker Pacific Properties, the exclusive real estate broker for the Palms.

Coldwell Banker received backup offers on more than half of the units sold. By yesterday afternoon four or five of the original contracts had fallen through and those units were offered to the backup buyers, according to Coldwell Bankers.

LaeRoc Partners bought the hotel in 2001 for $12.7 million and closed it in February 2003 to begin extensive renovations, which included removal of mold. The company submitted permit applications for $2.7 million worth of work. Based on the minimum price for each unit, the sale of individual rooms raised at least $28.8 million.

The repositioning of the Parkside is one of several recent conversions of Waikiki hotels into so-called "condotels" by owners finding they can sell units individually as condominiums for significantly more than what the property would fetch as a hotel.

LaeRoc Partners had originally planned to renovate the property and continue to operate it as a hotel, but changed plans as the market for "condotels" began heating up.

Properties converted, or in the process of being converted, for condotel sales include the former 242-room Waikiki Terrace Hotel, the former Ohana Ala Wai Towers now operating as the Aqua Marina, part of the Hawaiian Monarch Hotel, part of the Kuhio Village and the Bamboo Hotel.