Bye, Bye Genshiro Kawamoto — Hello, Kahala Avenue Property Values
Kahala neighborhood still worth a lot after departure of billionaire Genshiro Kawamoto.
One of the 27 Kahala Avenue properties that Kawamoto sold to Alexander & Baldwin.
Photos: Jonathan Morse
Take a stroll along Kahala Avenue and it’s clear that change is happening now that eccentric Japanese billionaire Genshiro Kawamoto has sold his controversial properties.
For one, the statues have been removed. Gone are the gaudy Greco-Roman statues of nude women, lions and other figures that made this pricey stretch of sought-after real estate look like Caesar’s Palace was having a yard sale.
Gone are the graffiti, boarded-up windows, broken glass, crumbling walls and over-grown weeds. After busily snapping up dozens of properties in ritzy Kahala over the past couple decades, the Japanese real estate mogul left some properties vacant, some overgrown with weeds, and at least one with a rock-filled swimming pool. Those mansions and oceanfront parcels are now cleaned up, sold or on the market.
“Hopefully, everybody agrees it’s a better place than six months ago,” said Lance Parker, senior vice president of acquisitions and dispositions at A&B Properties, a subsidiary of Alexander & Baldwin, Inc. “We certainly think it is.”
In the coming months and years, there will be new extravagant, multi-million-dollar homes lining what’s dubbed “The Avenue.” Expect these to be among the priciest properties on the island.
“You’re going to see beautiful, brand-new houses on The Avenue. It is going to be better than it was before … It’s going to be better than ever,” said Beth Chang, one of the brokers helping A&B with the sale of the properties formerly owned by Kawamoto.
In September, A&B Properties purchased 27 properties in Kahala from Kawamoto for $98 million in an off-market transaction. The company scooped up three more prized parcels on Kahala Avenue from Kawamoto in December for another $30 million.
A&B didn’t waste much time in getting the homes and lots prepped and put on the market. First priority, according to Parker, was removing the statues.
Parker acknowledged it was a transaction unlike any others A&B had done before. For one, A&B did not have their usual due diligence period to study the properties. In some cases, A&B wasn’t exactly sure what they were buying. However, A&B saw “inherent value,” and it was a “deal we really couldn’t pass up,” Parker said.
A&B’s investment is apparently paying off. So far, the company has sold 11 of its first 27 Kahala properties and has already returned about half of its initial investment.
Parker recently gave an update of the Kahala properties while speaking at an East Oahu Regional Meeting for the Honolulu Board of Realtors. Other agents involved in selling the properties also spoke.
Tracy Allen, another agent handling the sale of the A&B-acquired properties, said interest has been strong.
“The Kahala Avenue properties are seeing a new beginning,” she said. Many of the buyers are coming from Japan, China and Korea.
There are also many people looking to buy a second home who now “feel they can consider The Avenue as an option. Before they were shying away from it, just because the fact of they didn’t have the comfort level of who their potential neighbor could possibly be,” Allen said.
She said, “it’s just been an amazing outpouring: globally, nationally and locally. People are just elated and … thankful to A&B for returning The Avenue to us and helping to recreate the value that it has.”
Also on the panel of speakers at the recent meeting was Patricia Choi, the longtime agent for Kawamoto. Choi said her client “elevated the values of Kahala Avenue,” by paying the highest prices and making the market there.
That goes against the fears of many neighbors who complained bitterly for years that Kawamoto’s actions were depressing the property values in the pricey neighborhood.
Kawamoto offered to buy properties in cash with a five-day close. However, if sellers needed time to find another home or move, they would be offered a rent back at no cost for 30 days.
“No one turned him down except one person,” Choi said. “Everyone took his money because they had not ever seen that.
“He was a businessman. He had his own style, but he tried to be very nice to people in the transactions and negotiations.”
Choi said Kawamoto always treated her with great respect.
The enigmatic, eccentric octogenarian purchased hundreds of homes and condos in Hawaii starting in the 1980s with so-called “pocket change.” He made headlines here and in California for everything from his real estate dealings to allowing low-income Hawaiian families to live in his Kahala mansions.
While the statues are gone, as is the billionaire’s apparent reign over Kahala Avenue, one question remains: Has Hawaii bid a final aloha to Kawamoto?