kokua investments - loopnet...kokua realty, llc is pleased to offer for sale 69 hana highway, a...

INVESTMENT OFFERINGMaui Reta i l Center

69 Hana HighwayPaia, Maui, HawaiiKOKUA I N V E S T M E N T S .C O M

TABLE OF CONTENTS

1 Executive Summary Offering Summary Property Data Financial & Debt Summary Investment Highlights Tenancy Key Demographics Aerial Map

2 Property & Area Overview Property Overview Site Plan & Parcel Map Area Overview Demographics Aerial Map

3 Financial Overview Rent Roll Income And Expenses Tenant Profiles

The Fursse TeamMarketing & Selling Investment Properties Globally

The information herein has been obtained from sources we believe to be reliable, however we accept no responsibility for its correctness.1

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KOKUAINVESTMENTS.COM

KEONI FURSSE, CCIMREALTOR® Principal BrokerCEOHI Lic. RB-16700

[email protected]

KARA J. HEENREALTOR® SalespersonInvestment AdvisorHI Lic. RS-75141

[email protected]

JON MCKEOWNFINANCIAL [email protected]

PRESENTED BY


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EXECUTIVE SUMMARY

Kokua Realty, LLC is pleased to offer for sale 69 Hana Highway, a 2,154 square foot multi-tenant retail investment opportunity located in the retail heart of Paia, Maui, Hawaii. This fee simple property features a dynamic tenant mix, and an irreplaceable location in a vibrant, tourist oriented shopping community. Recently renovated in 2005, the property’s tenant mix includes Wings Hawaii Design, a local boutique and an events coordinator. 69 Hana Highway is prominently located in the trade area’s primary retail corridor, and walking distance from popular beaches and restaurants.

Address 69 Hana Highway, Paia, Maui, Hawaii 96779Parcel # (2) 2-6-002-006-0000Offering Price $2,800,000NOI $164,790Cap Rate 5.9%Occupancy 100%Total GLA 2,154 sq. ft. per County (1,894 SF net rentable area)Total Land SF 2,942 sq. ft.Year Built 1931 / Renovated 2005Ownership Fee Simple

OFFERING SUMMARY

FINANCIAL SUMMARY

PROPERTY DATA

PRICING SUMMARY

Purchase Price $2,800,000

Cap Rate 5.9%

Purchase Price ($/SF) $1,300

OPERATING CASH FLOW


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INCOME

Rental Income $168,314

Other Income (Parking) $6,000

Expense Reimbursements $9,471

Hawaii General Excise Tax (4.166%) $7,656

Effective Gross Income $191,441

EXPENSES

Real Estate Taxes $9,637

Property Insurance $2,391

Landscaping $1,800

Maintenance & Repairs $2,400

Property Management $0

Utilities - Electric $1,900

Utilities - Water $865

Operating Expenses $18,993

Hawaii General Excise Tax (4.0%) $7,658

Total Expenses $26,651

Net Operating Income $164,790

STRONG INVESTMENT FUNDAMENTALS

• Retail building located at the gateway to Paia’s retail corridor.

• Long term leases available for all tenants.

• Prime retail rent of $8.91 PSF/Month, NNN for anchor tenant.

• Stable “in-place” income with strong rental growth potential.

• Recent renovation (2005).

• Prime location – Prominently locate in the trade area’s primary thoroughfare and walking distance

to other local retailers and restaurants.

• Upside potential to convert all leases to Triple Net (NNN) leases to allow full expense pass through

and offer favorable rent increases.

PRIME LOCATION IN ESTABLISHED TRADE AREA

• Located on Hana Highway in the internationally recognized surf town of Paia, Maui, Hawaii – a busy

road into the Northshore of the island on the way to Hana.

• Strong demographics – more than 3,405 people living within 3 miles of the site, and an average

household income of more than $103,708.

• Prominently located on the trade area’s primary thoroughfare and minutes away from Kahului

Airport and Kahului Harbor.

LOW MANAGEMENT HASSLE

• Easy to manage two-tenant property.

• Convert all leases to allow full pass through of all property related expense.

• Recent 2005 renovation.

TROPHY PROPERTY & IDEAL 1031 REPLACEMENT

• Hawaiian architecture and design create a stand out property.

• Offered free and clear of existing debt – financing available at historically low rates.

• Available for quick close to accommodate 1031 exchange timelines.

INVESTMENT HIGHLIGHTS


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HAWAII

MAUI

The subject is currently occupied by two tenants. The building is demised into three distinct spaces:

a main retail space that is accessed by Hana Highway, a studio/one bedroom dwelling unit with one

full bathroom and a full kitchen, and a storage space. The main retail space (Space 1) is leased to

Wings Hawaii Design, a boutique that sells clothing and gifts. Units 2&3, along with the property’s two

parking spaces are leased to the owner of the subject property.

TENANCY

KEY DEMOGRAPHIC INFORMATION


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POPULATION 1-MILE 3-MILE 5-MILE

2021 Projection 2,492 3,661 10,338

2016 Estimate 2,310 3,405 9,717

2010 Census 2,117 3,136 9,105

Growth 2016-2021 7.88% 7.52% 6.39%

Growth 2010-2016 9.12% 8.58% 6.72%

INCOME 1-MILE 3-MILE 5-MILE

2016 Est. Average Household Income

$96,348 $103,708 $94,317

HOUSEHOLDS 1-MILE 3-MILE 5-MILE

2021 Projection 906 1,292 3,683

2016 Estimate 839 1,202 3,455

2010 Census 769 1,108 3,323

Growth 2016-2021 7.99% 7.49% 6.60%

Growth 2010-2016 9.10% 8.48% 6.90%

69 Hana HighwayPaia, Maui, Hawaii



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9.3-Acre Mixed-UseDevelopment(Retail, Office & Residential)

339-Acre Development (Sold December 2016 for $9.99 Million or $29,453 per acre)


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PROPERTY & AREA OVERVIEW

69 HANA HIGHWAYAddress: 69 Hana Highway, Paia, Maui, Hawaii 96779

Assessor’s Parcel Number: (2) 2-6-002-006-0000

Number of Buildings: 1

Land Size: 0.07 Acres (2,942 SF)

Building Size 2,154 SF

Occupancy: 100%

Year Constructed: 1931 / 2005

Parking: 2 surface parking spaces

Traffic Counts: 18,799 VPD


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PROPERTY OVERVIEW


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MAUI COUNTYRETAIL RENTS IN PAIA

RETAIL VACANCY IN PAIA

PAIA TOWN

Maui County is the third most populous of the four counties of Hawaii, with a total resident population of 154,834 (2010 Census); a change of 20.1% from 2000 and 52.2% since 1990. Due to a variety of geographical features, Maui was selected “Best Island in the World” the last twenty out of twenty-two years by readers of Conde Nast Traveler magazine. Resort accommodations on Maui have consistently ranked above other Hawaii resort destinations and include The Wailea Beach Villas, Andaz Maui at Wailea Resort, Four Seasons Resort Maui at Wailea, The Fairmont Kea Lani, Ritz-Carlton, Grand Wailea, Westin Maui, Hyatt Regency and many others. Maui welcomes approximately 2,100,000 visitors per year.

Recently completed or currently developing commercial projects include: 141,241 SF New Target store in Kahului 275,000 SF Puunene Shopping Center, Kahului (when completed) 103,249 SF Maui Lani Shopping Center & Safeway, Wailuku 148,000 SF The Outlets of Maui, Lahaina

The property is located in the country town of Paia on the north shore of Maui. Maui is comprised of two major landmasses joined by an isthmus. East Maui was created by a volcano known as Haleakala, while West Maui is a group of mountains known collectively as the West Maui Mountains. The upper elevations of Haleakala are known as the “upcountry” region, and its major destinations and population centers are located directly upslope of Paia.

Historically, Paia served as the site of the plantation camps of workers at the Paia Sugar Mill. The Sugar Mill opened in 1880 and was Maui’s oldest operating plantation until its closure in 2000. The population of Paia at the peak of the sugar industry was more than 10,000 people, comprising over one-fifth of Maui’s entire population. In 1978, the perfect windsurf conditions at Ho’okipa Beach Park just north of paia were discovered. Paia began to develop its reputation for being the “Windsurfing Captial of the World”. In the ‘80’s and ‘90’s Paia saw an influx of windsurf enthusiasts from around the world searching for the windsurf mecca. Today, during the winter months, several professional wind and kite-surfing competitions take place which attract thousands of visitors.

Paia’s old plantation town character is preserved in the architecture of many of its buildings, including the subject, making this a popular tourist destination. The town provides a wide variety of unique retail boutiques and dining establishments, art galleries, a few small independently owned hotels, and other vital commercial and cultural amenities. Residential uses are found along the periphery of the core commercial area. As well as being a destination in itself, Paia is the last major stop along the Road to Hana (Hana Highway) on the far Eastern Coast of the island. Paia is also located along the route to the upcountry destinations of Makawao and Kula, and the summit of Haleakala. The southern portion of the main commercial area (where the subject is located) fronts to a white sandy beach.


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AREA OVERVIEW

DEMOGRAPHICSPopulation growth for Hawaii has historically outpaced that of the national average, except in 2007. Growth will continue to be influenced by the employment opportunities linked to the tourism sector and the limited space available on the Hawaii Islands.

The following highlights the key statistics for population growth in Hawaii:

• Hawaii’s annual population growth averaged 1.0 percent between 2005 and 2015, compared to the 0.8 percent average rate of growth for the nation.• The region’s population is forecasted to grow an average of 0.9 percent annually, slightly higher than the nation’s projected rate of 0.8 percent from 2016 to 2020.• The state is the 13th most densely populated in the U.S.

The population growth for Honolulu County is project to slow even more during the next five years to an average annual rate of 0.6 percent. Of all the counties in Hawaii, Maui County is the only county projected to have a higher annual growth rate in the next five years than the county recorded from 2005 to 2015.

Household formation trends in Hawaii closely followed population growth trends. While household formation trends appear to mirror overall population gains, household growth is expected to rise above population growth levels over the next five-year period. The most recent recession had little to no effect on household formation. Rather, household formation increased from 0.5 percent in 2007 to 1.3 percent in 2008, a 160.0 percent increase.

Further considerations are as follows:

• Annual household growth in Hawaii between 2005 and 2015 averaged 1.1 percent, higher than the nation’s ten-year average growth rate of 0.9 percent.• The projected five-year, from 2016 to 2020, average household growth rate for Hawaii is forecasted at 1.3 percent, slightly above the national average growth rate of 1.2 percent.


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DEMOGRAPHICS SUMMARY


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Main Intersectionof Hana Highway & Baldwin Avenue

9.3-Acre Mixed-UseDevelopment(Retail, Office & Residential)

339-Acre Development (Sold December 2016 for $9.99 Million or $29,453 per acre)


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Puunene ShoppingCenter and Target

KaahumanuShopping Center Maui Mall

Kahului Airport



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FINANCIAL OVERVIEW


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69 HANA HIGHWAYUnit Tenant Lease Start Lease End SF % of GLA Contract Rental Rate Rent Per Sq. Ft. Rent Increases Lease Type Options

1 Wings Hawaii Design 09/05/13 09/30/18 711 37.5% $76,033.44 $6,336.12 $106.94 $8.91 10/01/17 $78,314.40 NNN None

2 Paia Inn, LLC 11/01/13 11/01/16 585 30.9% $60.000.00 $5,000.00 $102.56 $8.55 None - MTM Gross None

3 Baskin Design, LLC 01/01/16 03/31/21 598 31.6% $30,000.00 $2,500.00 $50.17 $4.18 None Gross None

Occupied Totals - In Place 1,894 100.0% $166,033.44 $13,836.12 $87.66 $7.31

Vacant Totals 0 0.0% $0.00 $0.00 $0.00 $0.00

Total 1,894 100.0% $166,033.44 $13,836.12 $87.66 $7.31

RENT ROLL

Year Month Year Month

Notes:

1. Units 2 & 3 are operated by Landlord.

2. Unit 3 pays for parking (2 stalls @ $250/month/stall).

3. Units 2 & 3 can be converted to NNN leases if new leases are negotiated.

4. County website says building is 2,154 Gross SF.

5. CAM is estimated to be $.85 psf/month.


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69 HANA HIGHWAYYear

Total $/SF Total $/SF

INCOME

Rental Income $168,314 $88.87 $169,968 $89.74

Other Income (Parking) $6,000 $3.17 $6,000 $3.17

Expense Reimbursements $9,471 $5.00 $35,009 $18.48

Hawaii General Excise Tax (4.166%) $7,656 $4.04 $9,623 $5.08

Effective Gross Income $191,441 $101.08 $220,600 $116.47

EXPENSES

Real Estate Taxes $9,637 $5.09 $9,637 $5.09

Property Insurance $2,391 $1.26 $2,391 $1.26

Landscaping $1,800 $0.95 $1,800 $0.95

Maintenance & Repairs $2,400 $1.27 $2,400 $1.27

Property Management $0 $0.00 $10,419 $5.50

Utilities - Electric $1,900 $1.00 $1,900 $1.00

Utilities - Water $865 $0.46 $865 $0.46

Operating Expenses $18,993 $10.03 $29,412 $15.53

Hawaii General Excise Tax (4.0%) $7,658 $4.04 $8,824 $4.66

Total Expenses $26,651 $14.07 $38,236 $20.19

Net Operating Income $164,791 $87.01 $182,364 $96.28

INCOME AND EXPENSES

Year 1 - Actual Year 1 - Proforma

Notes:

1. Proforma Rental Income assumes all leases are converted to NNN leases.

2. 4.166% Hawaii General Excise tax is collected on income and 4.0% GET is paid.

3. Landlord currently self manages the property.

4. Tenants pay for their own electric.

WINGS HAWAII DESIGN

PAIA INN, LLC & BASKIN DESIGN, LLC

Wings Hawaii is a local boutique that sells a collection of handmade jewelry and women’s

clothing and accessories. In 2006, they opened their first brick and mortar on Maui’s North Shore.

Wings Hawaii Design is interested in expanding into Unit 2. They are the primary tenant fronting

Hana Highway.

Michael Baskin is the managing member of both entities and is an architect, builder, and

designer who is widely renowned for his refined sense of coastal style and ability to create

harmony between indoor and outdoor space. He has built and designed homes and small hotels

in Hawai’i, the Caribbean, California, and Thailand. A builder since 1987, his properties have

been purchased by celebrities and featured in publications such as the New York Times, Travel +

Leisure, Coastal Living, Men’s Journal, Sunset magazine, and more. The tenant uses the premises

for weddings and events held at the adjacent property.


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TENANT OVERVIEW

CONFIDENTIAL OFFERING MEMORANDUM

Kokua Realty, LLC (“Kokua Realty”) and the seller (“Seller”) of the property referenced herein (“Property”) present this Confidential Offering Memorandum

(“Memorandum”) to assist the recipient(s) (“You” or “Your”) in evaluating the Property and it is intended for Your use only. The information in this Memorandum

contains brief, selected information pertaining to the Property and should not be considered all-inclusive or permanent. The information in this Memorandum

has been obtained from sources believed to be reliable, but has not been verified and is not guaranteed. You should independently verify each item of and

have the same reviewed by Your tax advisor and/or legal counsel. Assumptions, projections, estimates and/or opinions are provided as examples only and

all information is subject to change, error, omissions and/or withdrawal without notice. Kokua Realty and Seller assume no responsibility for and make no

warranty as to the accuracy or completeness of any information in this Memorandum. Kokua Realty and Seller expressly disclaim any implied or expressed

warranties of merchantability, fitness for any particular purpose or non-infringement of intellectual property relating to this Memorandum. In no event shall

Kokua Realty or Seller be liable for any damages resulting from the reliance on or use of any information in this Memorandum, including but not limited to

direct, special, indirect, consequential or incidental damages. By accepting receipt of this Memorandum, You agree to the following (a) This Memorandum

is of a highly confidential nature, will be held in the strictest confidence and shall be returned to Kokua Realty upon request; (b) You shall not contact any

property manager, employee or tenant of the Property regarding the Property or this Memorandum, without prior approval of Kokua Realty or Seller; and

(c) You understand and agree that Kokua Realty represents the Seller and not You. Neither Kokua Realty nor Seller shall have any obligation to pay any

commission, finder’s fee, or any other compensation to any broker or other person. You may provide information to person retained to evaluate the Property

only after first obtaining a signed confidentiality agreement from such persons and providing a copy of such agreement to Kokua Realty. By accepting

receipt of this Memorandum, You agree to defend, indemnify and hold harmless Kokua Realty and Seller (including all of their agents, employees, subsidiaries,

affiliated entities, successors and assign(s) from and against any and all claims, disputes, litigation, damages, liabilities, losses, judgments, expenses, fines,

contributions, charges, injuries and/or costs and expenses, including reasonable attorneys’ fees arising or resulting from acts by You.


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The Fursse TeamMarketing & Selling Investment Properties Globally


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Exclusively Presented By

Marketing & Selling Investment Properties Globally

The Fursse Team

KEONI FURSSE, CCIM, R (PB)CEO & Principal [email protected]

808.280.6556

Kokua Realty, LLCCapital Markets Group

296 Alamaha Street, Suite AKahului, Hawaii 96732808.877.9000

Kokua Realty, LLC is one of Hawaii’s largest commercial real estate firms as ranked each year by Pacific Business News. Keoni Fursse, CCIM is the CEO & Principal Broker of Kokua Realty, LLC and leads the Capital Markets Group known as The Fursse Team specializing in the marketing and selling of investment properties nationwide and globally. When partnering with The Fursse Team, you receive superior client service from a team of experts who are dedicated to your success.

H a w a i i R e a l E s t a t e B r o k e r L i c e n s e R B -1 6 7 0 0 .Copyright ©2017 Kokua Realty, LLC. All rights reserved.KOKUA INVESTMENTS.COM

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