Kona Commercial Property Specialist

September 22, 2007

A time for homework

Filed under: Updates — Chuck @ 11:56 am

Today’s, Kailua-Kona commercial leasing and land business opportunities require a little homework and perhaps a crystal ball. If you are thinking of creating or moving a business to Kona, ascertaining whether there is a demand for your product or service may be the easiest part of the process.

Kona has suffered from inadequate roads and streets for over a decade. Both the County of Hawaii and State Department of Transporation have projects in process or are about to let out contracts addressing infrastructure. The county also has a fairly ambitious plan to improve many connector roads. Traffic patterns will change. When is the question? Where should your business be located?

There has been unprecedented growth in North and South Kona and along the Kohala coast, particularly in high value homes. Affordable housing has been brushed aside, adding to low unemployment woes. The current County Council is hell-bent on making affordable housing nearly impossible with a plethora of new government mandates and regulations. Qualified buyers are here, (although a few leave every month because there are no homes available.) Affordable housing is a good business opportunity for an akamai developer.

There is increased business demand both in retail and B2B. Leasing prices are rising as are land prices. This is an area for homework and due diligence.
Some of the larger landowners, particularly trusts, are insisting on leases that can be very onerous on the backend. Buying commercial property to own and build on requires even more homework. There are hardly any lots available, therefore prices are dramatically up from just five years ago. Judging the value of a property is more of an exercise in determining anticipated return on investment rather than relying on comparable sales.

And one last tidbit for today. Many of my readers know I have been long associated with Kaloko Light Industrial Park. Although there has been no sales information available (or permitted by County Ordinance), many know a third phase of 32 lots is making its way through the various county departments. My e-mail list of those who are keeping close tab on the subdivision’s progress is quite long. I share with you, the make up of this list suggests a bullish, immediate and long term future for the Kona commercial real estate market.