Owners of apartments in the Kahala Beach Condominium are preparing to surrender their properties and walk away empty handed in just two years.
The original 60-year ground lease for the 196-unit oceanfront project expires on July 15, 2027, and ownership of the buildings will revert to the landowner, Kamehameha Schools, the charitable trust established in 1884 to benefit Native Hawaiians.
Apartments in the Kahala Beach, nestled between the Waialae Country Club and the Kahala Hotel and Resort, range in size from 1,050 square feet to 3,510 sq. ft., and are spread across four 4-story buildings on 6.7 acres, with over 460 feet of beach frontage.
Kamehameha Schools also owns the land under the neighboring Waialae Country Club and Kahala Resort and Hotel, but previously extended those leases to 2060 and beyond.
However, Kamehameha has declined to extend the Kahala Beach lease, and refused to consider several offers from the Assocation of Apartment Owners to purchase the fee interest.
Although individual lessees have purchased their condominium apartments, the leased land and any improvements (meaning the buildings themselves) revert to the landowner when the ground lease expires. Hawaii is one of the few places in the United States where leasehold residential properties are found.
This reality of just walking away is common with commercial leases. If a business lease isn’t renewed, the business owner simply packs up and moves on. But it is far less common for residential properties, given the idea that one’s home is their castle.
There haven’t been many examples of lease expirations leading to evictions. Owners of the Kailuan Apartments were evicted by Kaneohe Ranch at the expiration of their lease at the end of 2007. Although there was substantial negative publicity, the ranch proceeded with redevelopment of the property.
As the Kahala lease expiration nears, owners have reported Kamehameha Schools may offer month-to-month rebtals or short-term rental agreements, perhaps a year at a time, while working on a longer term development plan for the property.
During an extended legal battle over setting of the lease rent for the final 10-year term (2017-2027), consultants concluded the “highest and best use” would be an ultra-luxury condominium development that maximizes the site’s best attributes, such as its direct ocean frontage and allowable height and density. It’s current A-2 zoning imposes a 60-foot height limit, 50% higher than the current 40 foot building height.
However, redevelopment won’t be simple. The Kahala Beach condo was built a decade before the state enacted laws for coastal zone management to ensure access to and protection of the shoreline, and its development limits have become stricter over time. There has already been considerable erosion along the ocean side of the property which continues at a rapid pace.
With the effects of climate change and rising sea levels, the property is now in a designated high-risk flood zone. This requires a base flood elevation of 9 feet, which would reduce the size of any new development. Further, underground parking, as exists in the current buildings, would no longer be allowed for new construction on the site.
Other factors include stricter regulations for handling of stormwater, and new street regulations require wider roadways and fire truck turnarounds, which could impose additional limits.
These and other factors leave the future of the area in doubt. Only one thing is clear. Current owners in the Kahala Beach will have to surrender their apartments to Kamehameha Schools in 24 months, even if they are allowed to stay with temporary short-term rental agreements.
The building was a luxury address when it opened in 1967, but as the remaining term of the lease has dwindled, long-term owners have been fleeing, with just 34% of apartments now owner-occupied, according to the condominium’s latest biennial registration filed with the state. Many units are being used as high-priced vacation rentals.
Although the buildings appear relatively well maintained, visitors report apartment owners are now reluctant to invest in needed repairs and maintenance in their individual units, and conditions are deteriorating. Apartments have been selling over the last several years at what often seem like bargain prices for oceanfront living, except that lease rent and monthly maintenance fees can run over $5,000 monthly, and in two years the master lease will end.
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It appears that Kamehameha Schools is making a poor decision considering the obstacles to redevelopment that you state.
What a great article. I wish every news story was like this.
Bishop estate would put a “anywhere USA”strip mall in its place if the numbers and permits panned out.
Very well written article Ian. Mahalo for the excellent reporting.
My prediction is that Bishop Estate will make no firm decisions before the the end of the lease.
When the Kahala Beach condominiums were being built, they dug up the Pu’u Makani Cemetery according to a 1968 lawsuit by Lena Teets. Her father, sister and husband were among those buried in that cemetery. Many coffin burials were dug up at the time and studied by the Bishop Museum as archeological finds. The old cemetery is clearly marked on the old Wai’alae maps of the area.
Thanks, Chris! I had never heard that. And I don’t recall ever hearing about it when I was growing up.
Here’s a description of these burials I found in a publicly available report.
I’m glad that you found this. My family owned an apartment there for 23 years before fleeing for a safer, fee-simple condo. If we had known about the cemetery and removal of remains, we would never have bought in the first place. The residential lease-hold system invited long-term catastrophes like the one at Kahala Beach.
I never did understand how someone could own a home on land that didn’t belong to them. In any case, this sounds similar to what is happening in Kamilonui Valley. Leases for nursery owners back there expired 6/30/25. It’s my understanding several were given the option to stay on for one year, but KS hasn’t provided much information on what they plan to do with the area (or JAIMS, 7-11, other business and townhouse properties on Pepeekeo).
We are residents of Kahala Beach Apts. It has been beyond frustrating and quite disturbing to wait and wait to hear any pertinent information at all as to what they may or may not, offer residents following 7/15/27. While they hold our future in their hands, we have been left in limbo for many months, regardless of concerted efforts by our board to elicit any information. It is a cruel and callous disregard for the lives and future of those who live here.
On the mainland, private investors are buying up trailer parks which have often been the place of last resort for housing people struggling to maintain housing. They may own their trailer, but not the land. They often become homeless when the investor ‘upgrades’ the property and (greatly) increases the rent. Moving their trailer costs more than they can afford. ?
Most of Kahala, Waialae Kahala and other residential neighborhoods were all leasehold when I was growing up. Ian, you would know when Bishop Estate allowed people to buy their land. Here’s a 1984 article from UPI telling more.
https://www.upi.com/Archives/1984/06/03/Obstacles-block-land-reform/6238455083200/
My parents bought in the first round of fee sales by Bishop Estate in 1982. My dad was retired, so we co-signed the loan to be sure they would qualify. Good thing. The price tripled in what seemed like no time at all.
I am a visitor to Hawaii, and love coming as often as possible. I have stayed in condos and homes on the Island of Oahu. The Kahala Beach Apartments has been my favorite place to stay. I am very sad to hear that the future of the apartments is uncertain. The building itself is beautiful, a mid-century design with beautiful grounds. Everything is so well maintained, and well taken care of. It is understandable that some of the residents don’t want to do any major repairs to their apartments if they are going to lose them in 2027. The apartment we have stayed in, is beautiful and well taken care of. I love the feel and look of the buildings. I would feel so bad if they were to be torn down. Could the building be registered as a historical building? I’m sure the residents have looked into every option to save their homes. I am hoping that the Kamehameha Schools will consider continuing the lease to the residents of the Kahala Beach Apartments as they have to the Waialae Country Club and Kahala Resort and Hotel.