Honua Kai

Background
Honua Kai Resort & Spa, located on Maui was voted by Condé Nast Traveller as the “Best Island in the World” an unprecedented 16 times, and is situated on nearly forty acres of the world’s most beautiful beachfront at Ka’anapali Beach.
The 2009 completion of the over 600 room Honua Kai Resort & Spa provided Ka’anapali with the first unrestricted whole ownership condominiums in over 30 years along this beautiful Maui Coast.

Project
Honua Kai Resort & Spa is a one-of-a-kind destination on Ka’anapali Beach, offering the services and amenities of a luxury hotel together with spacious resort condominiums. Honua Kai Resort & Spa is a master planned resort community including two condominium towers, three distinct pool experiences, a gourmet market, and the iconic Duke’s Beachside Restaurant– all situated upon Maui’s famed Ka’anapali Beach.
The condominium development consists of two towers, with residences featuring ocean and mountain views, open floor plans, and spacious outdoor lanais.

Our Involvement

• Playground was involved in the original sales and marketing efforts focused to pre-selling both towers in three separate real estate ‘launches’ in Dec 2005, Dec 2006 and May 2007 respectively.
• During the market crash and facing the delivery of 600+ units at Honua Kai to owners with only 20% down, Erika Alm, as SVP Sales at Playground, assembled a closing team and developed a strategy to recapture buyers who had made an original pre-sale purchase commitment.
• Tactics included an extensive contact campaign, financing and lender support, and development of a negotiation framework approved by the developer for those able to close under amended circumstances.
• Closings were a significant success, with contracts valued at over $500M closing to happy owners. Honua Kai remains one of the most successful real estate master plans in the state of Hawaii today, based upon the strong closings results achieved over 2009 and 2010.

Challenges
The project initially sold out over 90% of the resort to buyers who put 20% down during three real estate ‘launches’ held over late 2005 to mid-2007 and was massively successful due to pent up demand in Maui, a strong market, and a uniquely high quality offering on Ka’anapali Beach.  However, the towers were completed and delivered to owners through one of the most challenging economic times the United States has experienced in the Global financial crisis of 2009-2010.
The Maui market, particularly West Maui, was inundated with inventory across all price ranges during 2008 and 2009, as owners worked to reduce their personal debt loads and some buyers became wary of negative momentum in the market.
Honua Kai also influenced the West Maui condo market, by delivering over 300 condos to a market with approximately 400 total condo transactions in a typical year.

Lessons Learned
Large-scale presales or pre-construction selling may never again see demand outstrip supply to the extent that it did in 2005 and 2006.  Consequently, only very special product in very unusual market situations will see customers line up to purchase real estate years before delivery. Our approach to marketing, sales, and even development evolved throughout our involvement at Honua Kai, as we adapted our approaches to changing market conditions.
Most importantly, closing is not just ‘the second sale’, but must be of paramount focus during the sales process.  Effective sales and operations must be aligned to eventual closings goals, including everything from financing to escrow, and all other steps required to take possession of a home.