Kahala Beach Apartments - Kahala Condominiums

Kahala Beach Apartments are at 4999 Kahala Avenue, in Honolulu, in the Kahala Area neighborhood. I get more inquiries regarding these condominiums than any other property on Oahu because of the very often abnormally low prices and the very nice oceanfront area in which the Kahala Beach Apartments are located. THESE ARE LEASEHOLD (v. Fee Simple) PROPERTIES.  Below is what is currently listed.

READ MORE BELOW ABOUT THE LEASEHOLD KAHALA BEACH APARTMENTS IN KAHALA, HONOLULU, OAHU, HAWAII

KAHALA BEACH APARTMENTS: WHAT IS THE CATCH?

The Kahala Beach Apartments are the only beachfront condomimums in the upscale and exclusive Kahala neighborhood of Honolulu.  Actor, Jack Lord, Steve McGarrett of the original Hawaii Five-O, used to live in the Kahala Beach Apartments, along with other celebrities. Makes sense, this is an ideal location in the prestigious Kahala area, and right next door to the Waialae Golf Course and Country Club, home of the annual Sony Open, and the Kahala Hotel & Resort. Most of the units are large and lovely, so the Kahala Beach Apartments provide an ideal setting for relaxed tropical living.

The Kahala Beach Apartments were built in 1967. When you walk onto the Kahala Beach Apartments condominium property you will see an impressive mid-century designed entrance of towering colonnades and reflecting pools, opening to lush grounds landscaped with tropical plants and koi ponds. There are four low-rise buildings on the Kahala Beach Aparments, for a total of 196 units.

The Kahala Beach Apartments range from spacious 1 bedroom units of over 1,000 square feet to 3,400 square foot 4 bedroom units. There are mostly 2 bedroom 2 bath units. All units have a lanai. Twenty-four units offer fabulous oceanfront views. Other amenities include a fitness room, swimming pool, library, guest parking and 24-7 security.

Some of these Kahala Beach Apartment condominiums have recently sold for as low as $60-$85K, where other similar Honolulu Gold Coast condos sell for hundreds of thousands or even over $1M.  Some of these properties used to sell in the millions, as well.

THIS IS THE CATCH: These are leasehold units and the lease is close to expiring, in 2027.
What does this mean for buyers and owners?

• No banks are loaning on this property with a lease expiring in less than 15 years. So any purchasers must pay all cash.
• Upon expiration of the lease, unless a new lease agreement is offered, all owners will be legally obligated to surrender the premises in 2027. Any investment will be lost. To my knowledge, there are no plans for the Bishop Estate to offer new leases to owners. Given the value of the property and future potential for redevelopment or resale, it is very, very unlikely that Bishop Estate will offer a new lease.
• The lease rent (remember it is a leasehold property, so you have to pay rent to the fee simple owner of the property) on the Kahala Beach Condominums is high.  The lease rent is in addition to the monthly maintenance fee. Currently (as of 1/2013 and through end of 2017), the lease rent on a 2BR/2BA, approximately 1500 square foot unit is $2206. The current monthly maintenance fee on this same unit (which DOES include utilities) is $1117.  Total on 1/2013 is $3323 a month to live in this unit, NOT including real property taxes. The maintenance fees and lease rents are more for larger units. So, after the cash investment to purchase, you must pay approximately $3500/mo or more to own the Kahala Beach Apartments.
• The current lease rent is set to be renegotiated in 2018, which means the lease rent could go up even higher at this time. The last lease rent increase was in 2008 and before that 1998, when the lease rent went up by 80%.

Still, people choose to buy at the Kahala Beach Apartments. Those who purchase the Kahala Beach Apartments do so because of the unique, luxurious lifestyle the Kahala Beach Apartments afford the owners, not for the investment value.  They are beachfront, in spacious, home-like condominiums, in one of the most expensive neighborhoods on the island, at a much lower cost than to purchase a single family home in the area. This makes sense to some people. Buyers of the Kahala Beach Apartments are not interested in building equity and many are retired, or not worried about leaving this specific asset to heirs. These are also prime rental properties and the units get good rents, but there is a minimum rental period of 31 days. If shorter occupancy is desired, an owner cannot legally rent to another occupant unit the prior tenants’ 31 day minimum occupancy period is over.   

If you are interested in purchasing at Kahala Beach Apartments or would like more information, please contact Yvonne Ahearn at 808-721-8088.