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Howard Hughes' Mahana Tower Expansion Could Add 7% More Units, Influencing Future Honolulu Real Estate Values

·7 min read·👀 Watch

Executive Summary

Howard Hughes Corporation is proposing to increase the unit count at its under-construction Mahana Tower in Ward Village by 111 units, potentially impacting future housing supply and investor strategies in Honolulu. While presales are not immediate, this could signal shifts in developer appetite and market absorption rates. Real Estate Owners: Monitor planned unit increases for competitive landscape shifts. Investors: Review portfolio exposure to Honolulu residential development.

  • Real Estate Owners: Monitor new unit supply increases for competitive shifts.
  • Investors: Assess potential dilution of market value and new investment opportunities.
  • Action: Watch Honolulu City Council zoning and permits for Mahana Tower; track presale launch for market demand signals.

Watch & Prepare

Presales later this year

The project is in the proposal stage with presales expected later this year, meaning immediate operational changes are not required, but long-term planning could be affected.

Watch the Hawaii Community Development Authority (HCDA) proceedings for the Mahana Tower proposal in Kakaʻako. Simultaneously, monitor the market response to the Mahana Tower presales launch later this year. If the HCDA approves a significant density increase without substantial mitigation measures, and presales indicate strong absorption rates, consider reviewing your portfolio's competitive positioning in comparable Honolulu neighborhoods. If presales are sluggish, it may signal a market correction or oversupply, prompting a more cautious investment approach.

Who's Affected
Real Estate OwnersInvestors
Ripple Effects
  • →Increased Residential Development → Higher Demand for Construction Labor & Materials → Potential Wage Inflation & Supply Chain Strain
  • →Added Residential Density → Increased Strain on Local Infrastructure & Services → Potential for Higher Infrastructure Fees for Future Development
Aerial cityscape of modern skyscrapers in downtown Honolulu on a sunny day.
Photo by Cyrill

Howard Hughes' Mahana Tower Expansion Could Add 7% More Units, Influencing Future Honolulu Real Estate Values

Howard Hughes Corporation has submitted a proposal to increase the number of residential units at its Mahana Tower project in Kakaʻako by 111, representing a potential 7% expansion of the planned development. This amendment, which would increase the total unit count from 469 to 580, is currently under review by the Hawaii Community Development Authority (HCDA). The developer demolished the Ward Gateway Center in 2021 to prepare for the Mahana project, with presales anticipated to commence later this year. This expansion, if approved, could have implications for the long-term supply dynamics and pricing strategies within the Honolulu residential real estate market.

Who's Affected

  • Real Estate Owners (Developers, Landlords, Property Managers): The potential addition of 111 units could increase the overall supply of residential properties in Kakaʻako. For existing property owners and landlords, this could translate to increased competition, potentially impacting rental rates and property values in the medium to long term. Developers planning future projects in similar urban core areas should monitor HCDA approval processes for potential precedent-setting decisions regarding density increases. Property managers may see a larger inventory to draw from, influencing leasing strategies and commission structures.
  • Investors (Real Estate Investors, Portfolio Managers): The proposed unit increase at Mahana could alter the supply-demand equation for Honolulu's residential market. Investors should consider how this augmented supply might affect the absorption rate of new units and the potential for price appreciation or stabilization. If approved, this signifies continued developer confidence and activity within prime Honolulu locations, potentially creating new investment opportunities but also raising questions about market saturation if other projects also pursue density increases. The timing of presales will be a critical indicator of current market demand.

Second-Order Effects

  • Increased Residential Development → Higher Demand for Construction Labor & Materials → Potential Wage Inflation & Supply Chain Strain: The addition of 111 units, even in a project already underway, implies sustained demand for skilled labor and construction materials. In Hawaii's constrained economy, this prolonged demand can lead to upward pressure on wages for construction workers, contributing to higher overall development costs. It also places ongoing strain on the limited supply chains for construction materials, potentially leading to longer lead times and increased material costs, further impacting the feasibility and cost of future projects across the island.
  • Added Residential Density → Increased Strain on Local Infrastructure & Services → Potential for Higher Infrastructure Fees for Future Development: A significant increase in residential units places additional demand on Kakaʻako's existing infrastructure, including water, sewage, and transportation systems. If density increases become a common trend, this could necessitate costly upgrades to public services. Future developers might face higher infrastructure impact fees or be required to contribute more significantly to public amenity improvements, increasing project costs and potentially slowing the pace of new development.

What to Do

This development is in its proposal and planning stages. Immediate operational changes are not required, but strategic monitoring is advised for the next 6-12 months.

  • For Real Estate Owners:
    • Monitor HCDA Approvals: Closely track the HCDA's deliberation and final decision on the Mahana Tower unit increase proposal. Pay attention to any conditions or revisions imposed during the approval process, as these could set precedents for future development. Follow news from the Hawaii Community Development Authority for official updates.
    • Analyze Market Competition: Keep an eye on the official launch of Mahana's presales, expected later this year. Note the pricing and sales velocity to gauge current market absorption capabilities for new, high-density residential projects. This data will inform your competitive positioning and rental/sales strategies.
  • For Investors:
    • Track Presale Performance: The success of Mahana's presale launch will be a key indicator of buyer appetite and the market's capacity to absorb additional inventory. A strong presale performance could signal continued strength, while slower sales might suggest a market nearing saturation or a need for revised pricing strategies.
    • Conduct Portfolio Review: Assess your current holdings or investment thesis related to Honolulu residential real estate. Consider if an increased supply in a prime area like Kakaʻako warrants diversification or adjustment of your exposure, particularly if you hold properties or investments in competing market segments or new developments.

Action Details:

Watch the Hawaii Community Development Authority (HCDA) proceedings for the Mahana Tower proposal in Kakaʻako. Simultaneously, monitor the market response to the Mahana Tower presales launch later this year. If the HCDA approves a significant density increase without substantial mitigation measures, and presales indicate strong absorption rates, consider reviewing your portfolio's competitive positioning in comparable Honolulu neighborhoods. If presales are sluggish, it may signal a market correction or oversupply, prompting a more cautious investment approach.

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