Big Island

Update on Ke Kailani at Mauna Lani Resort

News of a reorganization plan that would allow developer Michael Fuchs to hold onto his dignity, and a small interest in the Ke Kailani oceanfront project at the Big Island’s Mauna Lani Resort, was reported in the Honolulu newspaper this week.

Although the April 5th article provided some details, the existence of a plan filed with the bankruptcy court had traveled via the coconut wireless last week. (I heard it from two sources, including friends of the principals!) Whether the plan proposed to the bankruptcy court succeeds, or the foreclosure auction through which Hunt Companies planned to take control proceeds, one way or another, the property is too valuable to be abandoned.

The question I get regularly from clients and readers of my earlier blog posts about Ke Kailani is whether the lots currently for sale represent a best buy. How does a property at Ke Kailani compare with other vacant lots available at the Mauna Lani Resort (or elsewhere on the Kohala Coast for that matter)?

The oceanfront grotto at Ke Kailani is complete, but the second amenity area with workout facilities and tennis courts awaits fresh capital infusion

Buying Ke Kailani as an Investment

Clients asking about purchasing property at Ke Kailani fall into two categories. The first would be pure investors. By that, I mean purchasers without the capital or ambition to build a residence for themselves (or a spec house for that matter), who are attracted by the low prices they’ve been quoted. They are typically comparing the economics of buying a resort condo versus land banking at Ke Kailani.

Keep in mind that the association dues in a gated community, whether at the resorts or nearby at Kohala Waterfront or Kohala Ranch, are the same whether or not you’ve built on your lot. At Ke Kailani, that would be about $1,000/month even though only one of the two promised amenity areas is complete.

It is not uncommon for a Kukio purchaser to buy a lot strictly in order to use their extraordinary amenities despite the membership fee and ongoing dues, but that logic does not apply to Ke Kailani where the only amenity available is an oceanfront pool. For the same initial cost and dues, the buyer could purchase a Mauna Lani condo and use the Beach Club, or buy a condo literally next door at Halii Kai which has its pool and restaurant a few hundred yards from Ke Kailani’s grotto.

There are three Ke Kailani lots currently listed in the MLS at prices from $850,000 (MLS# 205437) for a lot that cost its current owner $1.5 million, to an almost-oceanfront listed at $2.5 million (MLS# 240339). I understand the deals being offered privately are more in line with developer price reductions announced two years ago as a desperation move. And that’s the big question mark for me if you are looking to buy a single lot at Ke Kailani for “investment.” When the ownership issue gets resolved, the owners of Ke Kailani will have two dozen lots to sell (more if they don’t complete additional homes).

In order to flip your lot, you will be competing with a top developer on-site sales staff at Ke Kailani…and with all the other vacant lots for sale at Mauna Lani Resort. There are thirteen building sites listed at Champion Ridge, Mauna Lani Point Estates, Pauoa Beach, and 49 Black Sand Beach (the latter two properties have club facilities at real sandy beaches, whereas Ke Kailani’s oceanfront is along a cliff). How many sold in 2010? Exactly two. Both were $4-$5 million estate sites close to the beach.

Buying Ke Kailani for your own Mauna Lani Home

The other type of buyer plans to build a second home or primary residence on the Big Island. Their question is more about the desirability and lifestyle at Ke Kailani compared with purchasing property at other Mauna Lani Resort oceanfront communities. They might also be considering vacant land options at Mauna Kea Resort, Naupaka Place, Haulalai Resort, or Kukio…or even non-resort real estate for sale at Puako or Kohala Waterfront.

My business partner, Pam Deery, has written about “why to choose Mauna Lani” and answering that question would be the first step in deciding whether Ke Kailani is where you want to purchase.

Even at Mauna Lani Resort, each community has its own unique feel. When you aren’t building for spec, you aren’t just buying a lot, you are buying a lifestyle. There is no substitute for a personal visit to feel which property resonates with you. We’d be happy to listen to what you have in mind and arrange for you to see a selection of vacant lots on your next visit.

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Mauna Lani Resort Residential Guide | Hawaii Life

May 28, 2012

[…] This high-end luxury development ran into some trouble, likely due to the timing of release in 2005/6 just as the market was taking its turn. See my business partner, Beth Robinson’s, review on Ke Kailani. […]

Mauna Lani Resort Residential Guide | Hawaii Life

May 28, 2012

[…] This high-end luxury development ran into some trouble, likely due to the timing of release in 2005/6 just as the market was taking its turn. See my business partner, Beth Robinson’s, review on Ke Kailani. […]

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