Who Owns O‘ahu?

Mystery buyers, high fliers and all those LLCs—we take a look at who’s claiming stakes on O‘ahu.
Photo: Cameron Brooks 


Depending on where you stand, O‘ahu is Eden, a culture clash, a land grab, a Game of Thrones, a pawn of empire and a jewel in the crown of a Native Hawaiian nation.


It’s also a great place to live, maybe the best in the world. And that’s our problem. Sought-after, beloved O‘ahu is under pressure to house us. And we’re under pressure to hang onto our pieces of her—unless we don’t have a piece. Then we’re faced with prowling the rapidly overheating real estate market, our purchasing power growing lighter by the day. 


Under the circumstances, it’s no wonder we’re wondering who we’re up against. Mystery traders and straw buyers and Russians? We’ve all heard the stories. And don’t let anyone tell you the bogeyman is all in your head—you may get a pachinko parlor tycoon for a neighbor. Or an investor who named his yacht “Gangster’s Mistress” in Bulgarian. (Want to guess how much of industrial O‘ahu his company controls?)


Then there are the five members of the board of directors of Au Bon Pain and the purveyors of gold bullion.  


Don’t get us wrong: We like croissants. And we love gold bullion. But the rapid increase of residential properties purchased by shell corporations poses its own set of problems. 


Who owns O‘ahu? This year we found ourselves asking that question a lot. Because things feel different, somehow. We’re unquestionably seeing a number of trend lines converging. We feel it viscerally sitting in traffic gridlock, seeing cranes everywhere (16 of them right now on O‘ahu, according to the Rider Levett Bucknall North American Crane Index), reading about escalating housing prices driven by both local and foreign demand. At times it feels as though the ’80s are breaking out all over again. Sometimes it feels as if Hawai‘i is slipping away, into the hands of others.


But is that true? Anecdotal evidence and talking story only take us so far. What does the data say? What do the experts say—the government officials who handle permits and planning, the real estate agents who stoke as well as surf the sales trends, the hotel executives, the well-connected kama‘āina and the Native Hawaiians, including the representatives of the land trusts?

Who owns O‘ahu? That’s the question HONOLULU set out to answer. What we found may surprise you.


The New Big Five Who Own The Most Land 

85,905 acres including 4,692 acres under the Department of Hawaiian Home Lands

60,080 acres

47,985 acres

30,000 acres

18,470 acres

Source: DBEDT 2013; Refects 2014 Castle & Cooke activity.


We know who the big players are. Although four familiar plantation names (Amfac, C. Brewer, Damon and Theo Davies) made an exit from our listing of the Top 40 state landowners compiled by this magazine in its May 1985 issue, the group is remarkably unchanged from the Top 20 listing from the City Department of Permitting and Planning (DPP) in 2013.


That two of the original Big Five, Castle & Cooke and James Campbell Company LLC (3,250 acres), still carry on today in some form is a reminder of Hawai‘i’s relatively short history of private-property ownership, which sprang into existence in 1840, when a new Kingdom of Hawai‘i constitution declared all land was held in common by the people and their chiefs, with the king as trustee. Consolidated landownership has been a hallmark of Hawai‘i ever since.



“Ownership also makes one think of ‘control.’ In this state one can legally own land, but actually doing anything constructive or entrepreneurial requires the consent and involvement of a wide variety of stakeholders. The best landowners spend an extraordinary amount of time developing productive relationships with all the community stakeholders. So, who controls O‘ahu? We all do!”—Charles Kelley Jr., chairman, Outrigger Enterprises Inc. 


Native Hawaiians 

What Do You Mean, “Own”? 

“No one owns O‘ahu,” says Office of Hawaiian Affairs CEO Kamana‘opono Crabbe. “No one owns these lands.” 


Crabbe works in offices on North Nimitz Highway, not far from the 200-acre site of OHA’s own future Kaka‘ako development. “Even though we live in the 21st century, with capitalism as the main driver of our economy and our lifestyle,” he says, “we have an ancient perspective toward the land—that we can never own it, we can only manage and care for it.”


The questions Native Hawaiians face are ones that can help all of us on the island address our fears, responsibilities—and culpability. “How do we share space, how do we share resources, while struggling to preserve the sacred spaces, the pristine environment?” he asks. “What we’re seeing is corporations becoming monopolies and driving prices up and driving inflation up. The Hawaiian dream of a local-born person here, of having their own house where their parents grew up, is becoming unrealistic.”


“We have lost that sense of neighborhood,” he adds, “that relationship with each other. We don’t want to be the Manhattan of Asia. We shouldn‘t be building in Ho‘opili or Koa Ridge. We should be investing in our food security with diversified farming, investing in ourselves with education so we can develop our own industry.”


For OHA and Native Hawaiians, the coming year will bring a watershed moment in nation-building. “If we’re successful,” Crabbe says, “we will elect delegates to engage in a convention where we set out a future pathway for self-determination. If our community agrees to open negotiations with the government to return those lands with which we will establish ourselves as a new nation, that will have a ripple effect on our economy and our future—not to interrupt or disrupt, but to come to some sort of resolution as to our place in Hawai‘i.” 



The Foreign Buyers

Here Comes Everybody 

Rumors aside, are waves of wealthy overseas investors really snapping up our best real estate? The folks over at Title Guaranty, which tracks foreign real estate transactions, gave us access to a six-year slice of their data for O‘ahu properties selling for more than $1 million. 


The Top Two are in a class of their own, far outpacing the next 25 countries. No. 1 is Japan, with 453 properties from 2009–2014. Total spent: $989 million.


Want to bet on No. 2? The Chinese? Not quite. 


Try Canada, by a mile. The country that gets an “eh?” for effort bought 363 properties for $838 million. It’s worth noting Canadians really swooped in during the bad days of the crash, in 2010, buying 80 properties; as our economy strengthened, they slowed down to 46 in 2014. 


Other numbers to mull over: The number of buyers from China in the past year more than doubled, while from Singapore they tripled. The totals (11, 9) are small, but this is a trend worth watching, says Mike Imanaka, senior vice president at Title Guaranty of Hawai‘i.


“Overall, Japanese investment remains dominant in Hawai‘i, but data suggests The Asian Tigers’ (Hong Kong, Singapore, South Korea and Taiwan) appetite is growing as well,” Imanaka wrote in an email. “Led by Singaporean investment, the Asian Tiger investment of $94 million nearly matched Canadian investment of $98 million. Chances are high, with more high-end quality product being made available on O‘ahu, the Tigers’ appetite may grow in years to come.”  


Where do the foreign buyers choose to buy? For all buyers in 2014, not just $1 million and above, it’s Honolulu—240 Japanese, 38 Canadian, 11 Chinese, 10 from Hong Kong and 10 from Korea. The Windward Side did draw 13 Japanese buyers and the Leeward Side 10 from Canada, but the other numbers were mostly ones and twos.


Supply and Demand 

Why Is There A Perpetual Housing Shortage?

In the Great Mahele of 1848, King Kamehameha III used his trustee powers to distribute 2.5 million acres to 245 konohiki, or chiefs, while reserving the remaining 1.5 million acres for himself as crown and government lands. A provision requiring commoners to file for their land was little understood or advertised and, in the end, the vast majority was dispossessed. The overthrow and annexation shifted most of those crown lands to the government. By the eve of World War II, it is estimated that more than half of Hawai‘i lands were held by about 80 people—and the remainder was held by one branch of government or another. 


“Large landowners maximize their wealth by urbanizing their land holdings in small portions for which they are paid top dollar,” says former state economist Paul Brewbaker, who now runs TZ Economics, a consulting company. “They shave off thin slices of their holdings to maximize their incremental market value. Now, remember that governments are among the biggest landowners per se. So it’s not accidental that their interests often coincide with those of the large estates and landholding corporations.”


Are you saying owners and government actually work together to create a shortage and maintain it? 


“Just because the interests of large landowners and large public entities are incentive-compatible,” says Brewbaker, “does not imply that a conspiracy exists.” However, he adds, “if government wanted to solve Honolulu’s affordable-housing problem, it would simply enable approximately 3,500 housing units to be built every year,” Brewbaker says. “Instead, approximately 1,500 are permitted by the City and County annually these days.”


In other words, “Being the people who give out the right to develop, and being the people who need the right to develop in order to realize the value of their vast landholdings, are naturally compatible, symbiotic situations for the applicants and the gatekeepers. The latter need the former to perpetuate their hold on economic power.”  


Where would you put those 3,500 units a year? Agricultural land like Ho‘opili?


“A dense, urban environment is economically the most efficient human social arrangement from a productivity standpoint. We can live on about 200,000 acres of urban land forever in Hawai‘i, and leave the other 4 million to agriculture and conservation.” As for ag land, keep it ag. “Urbanization of agricultural or conservation land is irreversible. You only get to generate the economic rents once. Require the jurisdictions to credibly, even ruthlessly enforce the existing urban boundary.”


(In case you didn’t get it, that is an economist’s way of saying “Keep the country country.”)


How Huis Help And Hurt Hawai‘i

The seminal book about Island real estate, George Cooper and Gavan Daws’ Land and Power in Hawai‘i, relentlessly examined transactions among the political, bureaucratic and landowning elite to paint a portrait of government “by the hui, for the hui.” But the book’s counterintuitive, ultimately seductive argument is that this is for the best: The only way to empower the previously shut-out members of society, in particular the Asian ethnic majority, was to throw a net of regulations over the giant trusts and landowners.


Published in 1985, Land and Power was about an era when what were called “haole banks” wouldn’t loan to Asian developers and potential homeowners. The long delays, the rope-a-dope permitting process, was an economic equalizer. Only when the landowners and their bankers cut the Democratic Party operatives and their appointees into the action did the building boom take off.


Later, after the flush of ’60s construction had finally alarmed enough people—by filling in the fishponds and lagoons of Hawai‘i Kai and killing the reef in Waikīkī with dredging and raw-sewage outfalls—the environmental movement stepped in and added its voices, and lawsuits, to the obstacle course developers needed to run. 


The regulatory net descended anew and has stayed in place. This is called “bureaucratic capture” by economists—think of giant Gulliver tied down by Lilliputians. 


Many say it’s still needed, and works for the betterment of all. Others beg to differ, including former state economist Paul Brewbaker. “This mythology of exclusion which might have been true in the 1940s and 1950s [has become] gradually irrelevant,” he says. “A single mom can get a mortgage if she has a good enough FICO score.”



The Resort Base

How WaikĪkĪ Works

Who Owns Waikīkī

71.79 acres

21.12 acres

16.6 acres

15.57 acres

11.56 acres

10.25 acres

Also: Halekūlani (3.5 acres), Outrigger Enterprises Inc. (2.5 acres), Weinberg Foundation affiliates, Anna Nieman Trust, Lillian Sapiro Trust, Cunha ‘Aina LLC, others.

Source: City and County, Real Property Assessment Division; all figures approximate as of 2013.


Once an intricate quilt of linked ponds, streams and rice paddies, Waikīkī today is a complicated bog of leases and land titles . The U.S. military hangs onto its 71-acre R&R headquarters at Fort DeRussy, while Kamehameha Schools, the Queen Emma Land Trust and the Queen Lili‘uokalani Trust draw revenues from their long-term tenants. Hotels and hotel management come and go, but much of the land stays in local hands—sometimes in very small increments, as in the case of the 1,315-sq. ft. easement, owned by the heirs of Stanley Cutter, that runs under the Hilton Hawaiian Village’s 22 acres.


Outrigger architect Roy Kelley started small back in the 1930s. He bought a six-unit apartment built in the early 1930s, grew the business slowly until after World War II, then fueled the mass-market tourism boom with the hotels that became the Outrigger Enterprises Group Inc. 


How does Waikīkī work? We asked Charles Kelley, Roy’s grandson and chairman of Hawai‘i’s largest hotel company (also Waikīkī’s largest local nontrust owner). The secret, he explained, isn’t ownership but management. Running an empire of 11,000 rooms and 4,200 employees worldwide requires flexibility and discipline. Outrigger has enjoyed great success outside Hawai‘i, in the Pacific-Asia region, but hasn’t hesitated to move into a market, such as Bali, and then move out. 


Similarly, Outrigger’s portfolio of owned and managed hotels in Waikīkī has risen and fallen, according to waves of tourism. “The hotel business is about buying low and selling high, in cycles,” says Kelley. “There’s the amount you make managing hotels, and the amount you make from selling. The money selling is where you make your money.”


With prices shooting up the past few years, “it’s a good time to be a seller,” Kelley says. “It doesn’t mean we’re giving up management. We’re very committed, we’re kama‘āina. We think it’s an advantage to be strategically diversified.”


Just as one sale from the Queen Emma Land Trust allowed the Kelleys to get a toehold in Waikīkī, a later sale by Kelley gave another Waikīkī self-starter and legend, William Mau, his big break. Kelley parted with a gas station and parking lot in order to allow Mau to build the Waikīkī Business Plaza. An alleged handshake deal included a no-hotel provision that Mau honored. The proceeds allowed Kelley to build two hotels, the Outrigger Reef and Outrigger Waikīkī—a testament to the interconnectivity underlying Waikīkī’s often mysterious workings.




Mainland Buyers

Malihini Magnet 

Your new neighbors include 1,269 Californians who bought O‘ahu homes worth more than $1 million each in the past six years, according to Title Guaranty data. The jump from 180 sales in 2012 to 257 in 2013 is notable: We must’ve done something right that year.   


Total homes sold to U.S. buyers (not including Hawai‘i residents): 2,816 over six years. The rest of the Top 10 after California: Washington (277), Texas (156), Colorado (135), New York (96), Illinois (87), Oregon (80), Arizona (69), Nevada (63) and Florida (48). At the bottom is Rhode Island, with a single sale in six years.


So where are our fellow citizens clustering? When all sales in 2014, not just those $1 million and above, are counted, Californians overwhelmingly prefer Honolulu (273), followed by the Leeward Side (76), the Windward Side (69), Central (30) and, finally, the North Shore (6). 


Where do local people buy? In 2014, for all properties, it’s Honolulu (4,471), Leeward Side (2,473), Central Plain (1,903), Windward Side (1,104) and the North Shore (130). 



The Big Developers

Kaka‘ako: For The Rich, Right?

Source: University of Hawai‘i Economic Research Organization (UHERO)


For the past few years, depending on who you talked to, the redevelopment of Kaka‘ako was either long delayed or hastily approved; an example of Hawai‘i taking care of its own or selling out to developers and construction unions; and was being built for the overseas rich as a place to park their capital or for put-upon locals who wanted to move out of their grandparents’ houses. 


Now that the first towers are sold out and the second and third waves of construction are gathering momentum, it’s possible to see what kind of New Urban Community is taking shape—to sort out the fears from the dreams and compare the sales pitches with the results.


One cautious, hopeful impression: So far, we’ve avoided the creation of a high-rise, overseas-millionaires-only, super city.


According to Howard Hughes vice president of development Nick Vanderboom, “At our first two residences, Anaha and Waiea, we’ve found that well over 50 percent of the buyers have turned out to be local residents.” Other sources cite the low-amenity, affordable developments by Stanford Carr, Castle & Cooke and Marshall Hung. Far from getting pushed out of Kaka‘ako, one expert says, “We actually may be seeing the average person getting pushed into Kaka‘ako.”


Nor did this insider see local buyers acting as deep-pocket speculators: “I saw only 10 flips at One Ala Moana and 12 at Waihonua,” he says, referring to 2014 data for two new luxury towers. “I’ve heard some say they’re holding on for the kids. It could be the only way to make sure they have a house.” 


These aren’t ultra-high-net-worth individuals, so the rising rental market may be encouraging them.


The rental market has definitely affected plans over at Howard Hughes. “We have a request in with HCDA (Hawai‘i Community Development Authority, the government entity with special-district jurisdiction in Kaka‘ako) to make an approved for-sale building, 988 Halekauwila, into a rental instead,” says Vanderboom. “Our research shows us that the need for rentals is four to five times the current supply.”


Urban planning isn’t known for sensitivity to local sensibilities. However, the other large landowner and developer in the area, Kamehameha Schools, has strived to anchor Kaka‘ako in Native Hawaiian values and culture—while heeding the bottom line. “In our nine blocks, we purposefully wanted to build a community with the rich, the people just starting out, the people just having their first move-up place to live,” says Paul Kay, director of real estate development at Kamehameha Schools. 


“When I grew up here, neighborhoods weren’t characterized by social class and income,” he recalls. “You could have a bank president on the street and a local HECO lineman on the street. We fought, we laughed, we played in the street. Nobody cared what kind of shoes you wore.”


Kay explains Kamehameha Schools’ vision as a design ethos: not just houses, but a community. Instead of a “my home is my castle” mentality, he says, “you will live your life in this community. You won’t just drive out in the morning and return in the evening to your four walls. Your café is the dining room, the restaurant is a meeting place. The classroom is the community center. Your office might even be an event like Honolulu Night Market. There will be jobs here, places where talented, creative people get to showcase their talents.” 


Still, the splashy sold-out success of the luxury towers at One Ala Moana and Waihonua doesn’t mean it’s a slam-dunk for other towers under construction. The owners in both places benefited from a strengthening economy and the lowest interest rates in history. Both developers also timed the luxury wave perfectly, selling to people least affected by—or quickest to recover and, thus, to profit from—the last financial crisis. 


But for everyone else trailing after, a lot can happen between signing a contract and taking possession. That typical two-year lag is of equal concern to the overseas and local buyer. For the Japanese market, “The value of the dollar versus the yen is something to watch,” says Better Homes and Gardens Real Estate Advantage Realty broker Jaymes Song. “With the yen now 120 to the dollar instead of 80, it’ll be interesting to see how it will play out.” 


Right now, an average purchase price of $1.6 million will be $2 million in two years. For our buyers, interest rates also hold the key—everyone knows they’re going up. But how much? 


As of this writing, there were still units available at Symphony, The Collection, and Ward Village’s Anaha and Waiea. Projects such as 400 Keawe and Keauhou Place had held lotteries that included some reserved housing for middle-income workers qualifying under the 140-percent-of-median-income rule. (That’s about $82,200 for Honolulu.) Price points ranged from $350,000 to several million dollars. Some new towers are being pre-sold before the public report. Brokers are also happily grouping older condos in the neighborhood under the Kaka‘ako banner. 


Meanwhile, says Song, “developers are rushing to cash in by getting approvals, selling and building as fast as possible before the next guy starts or before demand wanes.”


Although an outbreak of flipping could change things, it seems clear that Kaka‘ako is urban Honolulu’s best chance for a new community. “With two market-rate residential towers and the affordable rental tower,” says Vanderboom, “we’ll be providing homes for over 70 percent local buyers with our first three projects. For the vast majority, we expect the new home to be their primary residence.”


Kaka‘ako’s development offers a shift from O‘ahu’s population living horizontally—in suburban-style single-family houses—to living vertically, in towers.  “All along, this has been a place to come together,” says Kay. “Hawai‘i is not a dead culture, but a living culture. Not just a story of the past but one of how the past informs us.”


We’ve been fighting the big issues, but from a land-use perspective we missed something happening right under our noses: ‘Gentleman’s estates’ that are zoned small agriculture have been popping up all over.”—Tim Vandeveer, Defend O‘ahu


The Country 

Showdown in Lā‘ie

The City Council rejection of the BYU-Hawai‘i/Hawai‘i Reserves Inc. plan to build a new subdivision outside the urban border in Mālaekahana shouldn’t have come as a complete surprise. On several occasions since the 1980s, Zion Securities and its successor, Hawai‘i Reserves, for-profit arms of the Mormon Church, have announced and then canceled affordable housing plans inside the Lā‘ie footprint—each time after rallying community support for needed sewer and infrastructure funding that was then used to expand the Polynesian Cultural Center and hotel, and BYU-Hawai‘i. 


What was a surprise was the strong stand by City Council member Ikaika Anderson. “For me, it’s just not pono to develop in this certain area,” Anderson told news reporters before the vote. 


Apparently the “build a resort and housing will come” approach has met its match in an upwelling of North Shore sentiment against a dramatic alteration of the community’s rural character. 



Millionaires’ Mile

Who Owns Those Pretty Shells On The Beach? 

Photo: Cameron Brooks


Anyone can see who owns what by going online at realproperty.com and clicking on the “online records search” link. But the database is not searchable or sortable by name, only by number. So the average person can look but can’t see.


This opacity of information introduces mystery and anxiety into the question of who owns O‘ahu and especially, who has been buying up our island lately. That someone could be me. Or it could be you.


Or, it could be someone unknown. For instance, whoever owns seventwokalaheo LLC, a $12 million beachfront Kailua property, one of many held on that beautiful bay held by corporate shells or trusts. Of the nearly 50 beachfront properties between Kalama Beach Park and Kailua Beach Park, at least 34 are wholly or partially held in trust, and another seven are LLCs. 


The limited partnership, along with the trust, is an Island tradition, of course—one about which we have mixed feelings. Think the Castles and Campbells and Damons. Trusts and LLCs can be used to help families retain ownership of a property over successive generations. Some of those broad, green lawns with graceful plantation-style homes survive thanks to LLCs, trusts or condominium shells. 


Trusts also dominate Waikīkī hotels with tourism profits fueling the state’s No. 1 private industry, as well as for the leasehold owners, primarily Kamehameha Schools, the Queen Emma Land Trust and the Queen Lili‘uokalani Trust. Those profits go to run Native Hawaiian community’s schools and The Queen’s Medical Center. 


But the same legal minds and entities that preserved the ali‘i estates can also hide or obscure ownership. And that’s the rub. One man’s way of handing down a place to his grandchildren (or funding a clinic or neighborhood center) is another man’s tentacle of international capital, reaching into your neighborhood and cherry-picking a home that could be yours or your children’s.


The legal shell game is part of what’s turning Kailua into ground zero for the unregulated luxury vacation-rental market. Sure, we know the argument: Family members can make money on their place and use it to pay record-setting mortgages and ever-increasing property taxes. But often the house becomes a cash machine and the owner become less neighborly, as in absentee. 


Basically, legal shells invite strangers without community ties to step into our lives and treat us as stage props in their tropical holiday or, in the worst-case scenarios, as hotel valets. For every North Shore party house with beer-drenched carpeting, there’s a neighbor with raccoon-mask eyes who will bend your ear about how they’re moving out because of the noise and hassle. Ditto the neighbors of the CEO whose compensation lawyers advised him to put his Kāhala property under his company name, then run it like a timeshare or luxury hotel. If this company is a REIT—a real estate investment trust—it won’t pay any taxes in Hawai‘i.


This corporatization of O‘ahu is happening fast, as you’ll see from our chart on the opposite page. It’s perfectly legal, of course; so was the securitized derivative market that triggered the crash and subsequent Great Recession. But once a piece of beachfront is snatched up and placed in a trust or corporate shell, one of those LLCs and LTDs, it becomes shareholder-owned and its status goes murky. That Kailua or Kāhala or North Shore money-machine house might better be owned by Marriott or the Holiday Inn, because at least then it would be regulated.   


And, as the chart shows, in the case of Kāhala, the shelling of O‘ahu is already into the second ring of houses a block back from the beach, which raises the question about how far it will spread.



LLC-Owned Properties in Kāhala: There are 33 LLCs from Black Point to Kealaolu Ave.; only three list the street address for tax mailings, indicating a resident owner. Along the beachfront there are, in addition, over 30 properties held in trust.


The Faceless Corporations 

There Goes the Neighborhood 

Kailua Beach and the North Shore grab the headlines, but some of the real whale-watching goes on in the development and industrial side. When the Estate of Samuel Mills Damon and the Estate of James Campbell were winding down in the early 2000s, both sold properties to a Newton, Massachusetts, REIT called HRPT. With Damon’s 220 acres in Māpunapuna, Kalihi and Sand Island ($480 million) and 200 acres of Campbell Industrial Park ($115 million), HRPT founder/CEO Barry Portnoy and his partner/son Adam became the largest industrial landowners in Hawai‘i, according to a 2005 Hawai‘i Business article.


Then the shells started moving. HRPT changed its name to CommonWealth, then created a shell called Select Income REIT (SIR) for its O‘ahu holdings, which now included the land under some Longs Drugs stores and Pali Safeway. Through another affiliate, Senior Housing Properties Trust, CommonWealth also paid $70 million for the First Insurance Center in Honolulu. 


As a measure of how far we have moved from the plantation culture, with its expectations of hands-on, community-centric stewardship, consider this nugget from The New York Times about CommonWealth’s Adam Portnoy: His wife, Elika, is a runner-up Miss Bulgaria and expert marksman who played a belly dancer in the Christian Slater thriller, Assassin’s Bullet. Their yacht is called the Mutressa, which loosely translates to “gangster’s mistress.”


(Yes, I’m sure they’ll come to your baby lū‘au. Go ahead and slip an invitation under the gate, if you can get past the Dobermans.)


More to the point, CommonWealth/SIR controlled the fate of 200 Pearl Harbor businesses on 17 million square feet of land. Since acquiring Campbell Industrial Park, the company raised rents on expiring leases an average of 37 percent—which rose to 47 percent in 2013. 


Amid long-time accusations of running the publicly traded businesses as a personal fiefdom, the Portnoys came under shareholder attack when, in March 2013, CommonWealth notified the Securities and Exchange Commission it would be selling its 22 million shares of Select Income REIT.


The shareholder revolt succeeded in toppling management. Another, bigger billionaire, Sam Zell, took over and changed the name to Equity CommonWealth (EQC), but spun off and sold Select Income REIT’s $708 million of shares anyway. That reduced EQC company holdings to the Diamond Head Self-Storage facility at 633 Ahua St.


As for that 400 acres of prime industrial O‘ahu real estate, it’s still with Select Income REIT, under a new management team. SIR is currently offering Parcel 19 of the Campbell Industrial Park and is entertaining inquiries about its 158,036 square feet. But if you go on the City and County of Honolulu Department of Real Property Assessment System, 91-222 Olai St. is subdivided into two halves owned by yet another shell: ALPHA BT LLC.  


Thus, in our modern way, ownership is diluted among shareholders. That’s why, in more and more cases, “shareholders” are your new neighbors or your new landlords. Faceless, electronic ciphers traded daily on the stock exchange, you won’t be having them over for coffee anytime soon.


The Military Developers 

The Military Housing Scenario

The U.S. military may have triggered a long-term housing shift by inviting two Mainland building firms, Hunt and Forest City, and Australia’s Actus Lend Lease, to handle the replacement of 16,000 substandard military housing units.


“The builders were brought in to do a one-to-one replacement,” says a real estate industry insider. “But they did such a good job people noticed.”


It turns out the three builders are also developers, and now have broken ground in the local market. The result is going to be formidable competition for local builders and developers. Hunt has won the Hawai‘i Public Housing Authority contract to redevelop the Mayor Wright houses. A 500-acre site will host as many as 1,100 Hunt homes in Kalaeloa, the old Barbers Point Naval Air Station. Forest City is doing 499 rentals in Kapolei.


Efficient, experienced builders improving our housing situation—what’s so bad about that? Nothing—unless there’s a significant military drawdown, which was proposed earlier this year and then shelved. “Let’s say 10,000 of those military units become available,” said a local real estate consultant who has worked military ties. In the case of housing on military land, “the first right to rent goes to active service members, then to retired military and so on down the service ladder.”


The end result, he said, could be subsidized military retiree communities occupying land and housing in perpetuity, while surrounding property values soar.


It Couldn’t Get Worse, Could It?

What could make our housing pressure worse? “The dominance of Asia illustrates a larger trend,” writes Richard Florida, director of the Martin Prosperity Institute, in The Atlantic’s CityLab. Noting the rise of Singapore and Hong Kong, he says, “the wealthy in Asia also now hold more money overall than those in North America: $5.9 trillion … ” Politcal unrest and economic opportunities already have them looking here.


Forget the 1 percent—these investors are the 0.002 percent. To them, even a beachfront Kāhala house might look downright affordable. 



The Wrong Side of the Equation 

One reason we may be wondering who owns O‘ahu is that we feel we can’t afford to buy here. Plus, we worry about our children’s ability to buy when it’s their turn.


In June of 2013, Kimberly Burnett of UHERO, the University of Hawai‘i Economic Research Organization, calculated house affordability vis-à-vis income. To afford a median priced single-family house ($630,000), a household would need an income of $96,000 a year and a down payment of $126,000 at an interest rate of below 4 percent. 


Unfortunately, our median household income is $80,000. “The median family income would not be able to afford the median-priced home,” says Burnett. 


Not only that, but the median single-family home price reached a record $719,000 in December 2014. One good piece of news is the postponement of a 2015 interest rate increase by the Federal Reserve. 


Still, “only at interest rates well below 3 percent does the median home become affordable to the median household,” says Burnett. According to HSH.com, a mortgage information company, in 2012, interest rates for a 30-year mortgage touched a record low of 3.62 percent. The previous pre-Great Recession record low was in 2003, when rates for a 30-year mortgage hit 5.3 percent, lowest in 37 years. 


Do We Rent Or Own? 

As of 2010, 46 percent of o‘ahu residents rented and 54 percent owned; 58 percent of us lived in 196,000 single-family homes versus 42 percent in multifamily units.1 Nationally, 35 percent rented and 65 percent owned, so O‘ahu’s high cost of housing does have an effect.2 

1. Department of Permitting and Planning, City and County of Honolulu.  
2. NMHC, National Multi-Family Housing Council.




Top Dogs in Town 

Large, concentrated landownership allows shorthand characterizations to flourish, not always fairly, but usefully and, at times, colorfully. Here are some neighborhoods that could almost be company towns:


  • KAKA‘AKO: Howard Hughes, Kamehameha Schools, Office of Hawaiian Affairs (OHA).


  • WEST SIDE: the U.S. military, HEI/HECO, SIR (see box, “There Goes the Neighborhood”), Disney, Harry Weinberg Foundation affiliates.


  • KAPOLEI: The James Campbell Company LLC and its related affiliates.  


  • LĀ‘IE AND KAHUKU: The Church of Jesus Christ of Latter-Day Saints (the Mormon Church), through real estate arm Hawai‘i Reserves Inc.


  • KAILUA: Alexander & Baldwin Inc. paid $262 million last year to Kāne‘ohe Ranch and the Harold Castle Foundation for their Kailua Town holdings. 


  • NORTH SHORE: Kamehameha Schools, Dole.


  • MILILANI: Castle & Cooke (David Murdock).


  • KĀHALA: Alexander & Baldwin Inc. recently bought 16 percent of Kāhala Avenue (including 27 former Genshiro Kawamoto properties).


  • WAIKIKI: U.S. military, Hilton Hawaiian Village LLC, Kamehameha Schools Bishop Estate, Queen Emma Foundation (through its Queen Emma Land Trust), Kyo-Ya Co., Queen Lili‘uokalani Trust, Hālekulani, Outrigger Enterprises Group (Outrigger Hotels).



Top Landowners Statewide

1. State Government, including Department of Hawaiian Home Lands

1,565,538.0 acres

2. Federal Government 

530,122.9 acres

3. Kamehameha Schools

363,526.5 acres

4. Parker Ranch

106,737.1 acres

5. Lāna‘i Resorts LLC

89,184.1 acres

6. Alexander & Baldwin

88,763.3 acres

7. Moloka‘i Ranch

56,743.6 acres

8. Robinson Family

50,614.3 acres

9. Robinson Aylmer

46,040.6 acres

10. County Government

34,142.1 acres

11. Grove Farm

33,294.0 acres

12. Castle & Cooke

30,141.9 acres

13. Haleakalā Ranch

29,199.9 acres

14. Maui Land & Pine

23,042.1 acres

15. Yee Hop

21,636.6 acres

16. Ulupalakua Ranch

18,523.6 acres

17. W.H. Shipman

16,804.8 acres

18. Kahuku ‘Aina Properties

16,423.3 acres

19. McCandless Ranch

15,163.5 acres

20. Finance Factors

13, 240.3 acres


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