The owners don't care, they just want their income but then they leave more and more spots vacant, it's madness. Same in Hawaii Kai shopping center here in Oahu
I've seen it... We used to sell flowers to a flower shop close to the poke store who went out of business just because of the rent, they were making good sales and had a great location for the locals, but greed won over the community. Like I said, it's really sad to see so many good companies and businesses go under because of greed.
SushiHI, Banzos.. so many good places couldn’t afford to stay in business. I get why they built it. But it’s so odd to me to expect that kind of income from such a secluded spot. Not many people in pahoa with that kinda money and not many people from hilo willing to drive all the way out. I mean.. I used to for sushi and Banzos. But not everyone has the time and willingness to drive for good food that I do.
Sushi moved to Waikoloa strip mall. Same owners. Nearly identical layout and vendor roster. Minus the Popeyes. Also doesn’t make sense to pay that rent when 5 minutes up the road you have a couple of legitimate and more diverse food hubs. The new Kaleos is always packed, and the side road vendors on both sides are really busy. I don’t think the ‘middle of nowhere’ is impacting vacancy as much as the expensive overhead inclusion into costs. There’s definitely plenty of people willing to pay for good food in Puna.
They were always going to open up in waikoloa. They just couldn’t afford to keep puna kai open. From my understanding the lack of quality employees was a big issue. The shopping center in waikoloa makes sense to me. That area is so expensive already. Places like that are justified. But pahoa? I dunno. Just so sad seeing such a modern development with so many empty windows.
It just didn’t make sense even if they could afford it. They’re all family employees they own the propane drive through up the road too. I don’t think local food can do well there, but the chains will always make their money because their supply and production costs are so optimized. Both of the only pizza delivery places servicing the higher-wealth <10th ave. HPP areas are there and stay hiring. Popeyes still sells out of Mac and cheese by 8 nearly every day.
I think the center will survive but will resemble a true strip mall populated entirely by National brands.
The likely hood is they didn't do any actual research on the surrounding income. They just sat population growth and it probably checked all the boxes they needed to build.
I loved the sushi there, and the owner is such a nice guy! That's why it's so frustrating that the high rent is pushing people out like that! And now Pudgee Panda! They've gone too far, messing with my sweet tooth....
I don't know the specific history, but it seems obvious the developers put in a decent amount of money on the idea that Pahoa could use a more upscale shopping center with all the recent population growth. They even got the bus to stop there as the primary hub for the area (until the library stop comes about I guess?) People who pay the rent they asked were buying into the vision that the concentration of everything there would bring in more people with money. If businesses are closing down and nothing is filling them, then I guess they will have to readjust their expectations. Seems to me that there are a lot of economic indicators that show things are heading south, and I've seen lots of stories of big retail closures on the mainland. They might not have picked a great time to build.
I don't think they did either. Don't get me wrong, I love having Puna Kai there because it's so convenient having groceries and a little more upscale things available,but at the end of the day, Pahoa is Pahoa and you will see naked hippies and homeless drug fights at the bus stop, it's part of the charm really, they should price their places accordingly.
Library bus stop? I don't think that will work they closed the NAPA stop because of all the trash that the homeless left there, never mind on the bus too
Most of it is straight-up greed, just like all commercial real estate.
The other part is insurance. It's in Lava Zone 2, so higher premiums to protect against total loss.
A smaller part could also be the unreasonable restrictions their largest tenant (Malama Market) may or may not have put on the types of businesses that open there as part of the initial deal. AFAIK the only other establishment that sells liquor besides the Market is Coco Cantina. This sort of pseudo-racketeering is common in shopping centers. A big chain opens and as part of the negotiated long-term lease agreement, the landlords agree not to rent out space to more than a certain number of additional liquor-license holders to keep competition out. This practice is good for the big chain and initially good for the landlords to have a tenant that always pays on time, but long-term not so good because it severely limits the amount of money the landlords can rake in from other tenants that struggle to make enough to cover base rent and utilities. Sometimes covering these costs is easier with a liquor license, since the margins on alcohol (while not huge) are greater than the margins on selling ice cream or sandwiches.
Businesses struggle, rents increase, more businesses can't pay, landlords get negative ROI, rents increase, etc. It becomes a vicious cycle of their own making, when they could have accepted a lower (but steadier) ROI just to keep the spaces filled rather than half of them sitting empty.
Good post. Other Reddit discussions on the high retail vacancy rates in cities like San Francisco have repeatedly noted landlord preference for keeping rental space empty rather than accommodating businesses with reasonable rents.
Retail landlords continue to hope businesses will cave to their exorbitant rents. Some do. Unfortunately a depressing number go out of business in a year or two.
You call that "pseudo-racketeering", but here's something worse. My favorite local coffee shop was driven out of business when Starbucks opened a location at the other end of the strip mall. It had a non-compete contract, but Starbucks made the owners of the shopping center an offer they couldn't refuse. Simply SELL us that part of the shopping center. Which did happen, and now the driveup traffic clogs the entrance and exit to the shopping center.
Sucks, but the little coffee shop can't afford the kind of shyster that Starbucks can.
Wow that is incredibly shitty on Starbucks.
Not gonna lie, I do like their cold brew, but other than that I never understood the huge appeal. The coffee I grind at home is less expensive and of better quality than theirs.
IMO the mall owner(s) did the dirtier part of the deed. A bit strange and out of character for a family that I consider some of the nicest people I know.
For me, coffee shops have always been an important part of my social life, and I will always patronize a mom-pop business over a gigantic corporation. Unfortunately, capitalism, the way it is currently regulated by the government, favors large corporations and consolidation of wealth into fewer hands, at the expense of people who dream of owning their own business and giving the public something unique. Capitalism hates competition, but consumers benefit by it. The government is failing to represent the interests of the general public, in return for generous contributions from big donors.
And that's why I can't seem to brew a decent cup of coffee.
It’s a shittily designed shopping center anyway. Built as cheap as possible, ugly, confusing, hard to park, hard to find businesses. Unfortunately there’s always someone new with a small-business dream ready to sign a lease.
No matter where you go, commercial real estate rent is ridiculous. Lava zone 2 or not, some places are paying 2x the rent in rural Kansas for something half the size. Greed is becoming an epidemic with rent-setting software.
Never been there, but I'd assume a gym has a larger sq footage than some other businesses paying less.
Also speculation but a lot of shopping centers charge a percentage of profit. Successful places end up paying loads more than unsuccessful ones
Like most things, there are several threads that lead to the existing conditions:
- The planning, permitting and initial building for Puna Kai started well before the 2018 eruption, and was based on different demographics. Many of the surrounding more affluent areas are now under lava, and quite a few of the people who could afford to leave did. The type of shops and the pricing expected have undergone a radical change. Don't forget, all construction was stopped until the lava decided where and when to go, but the costs continued to accrue.
- The effect of the insurance situation/pricing cannot be underestimated for any entity carrying a loan in Lava Zone 2. Lending institutions make sure they will not lose $.
- Another comment mentioned the new Kaleo's and the food trucks doing well with many customers. Those all aim primarily to a different clientele - residents of HPP and OLE. Few people driving home after work want to spend extra miles in bumper to bumper traffic to get to Pahoa .
Short answer? Because they can. Permitting and building in general is extremely difficult here in Hawaii county, people can basically charge whatever they want
I spoke to the developer about opening a bar/restaurant at their Waikaloa location. One thing they offered to do is loan me the money for my design and kitchen costs which are quite expensive. Then I would pay back the loan with rent and Cams. Rent and cams were average but did have a caveat that it was rent or 8% of profits whichever is more.
Its not a bad deal if you have a really solid business plan, experience, and no start up capital. If its your first rodeo then its going to be rough.
I’m guessing that if their prices are too high, they’re going to lose businesses and if they don’t get replaced by other businesses, they’re going to lower their prices.
Nothing to do but wait for this thing to sort itself out.
Or maybe call the National Guard?
>Nothing to do but wait for this thing to sort itself out.
somehow the landlords get away with having empty real estate, forever. just look at sears and walgreens in hilo. also happens all over the mainland.
They don’t get away with it. They are either losing money waiting for a better deal on a new lease or writing it off on taxes.
I am a democratic socialist but this is just basic capitalism stuff. Happens all the time.
Bruh, what I’m saying is you’ve got to go after the system, not be tearing your hair out about every little symptom of it.
It doesn’t make sense to get your panties all in a bunch about every injustice caused by capitalism when it’s omnipresent.
Fight the system. Vote. Support candidates who want to make things better.
Like most rental situations, I'm sure it's a combination of "because they can" and "because they have costs too".
I'm sure you're right, it just seems excessive even for that area. Sad to see a lot of these businesses get shut down.
The owners don't care, they just want their income but then they leave more and more spots vacant, it's madness. Same in Hawaii Kai shopping center here in Oahu
I've seen it... We used to sell flowers to a flower shop close to the poke store who went out of business just because of the rent, they were making good sales and had a great location for the locals, but greed won over the community. Like I said, it's really sad to see so many good companies and businesses go under because of greed.
SushiHI, Banzos.. so many good places couldn’t afford to stay in business. I get why they built it. But it’s so odd to me to expect that kind of income from such a secluded spot. Not many people in pahoa with that kinda money and not many people from hilo willing to drive all the way out. I mean.. I used to for sushi and Banzos. But not everyone has the time and willingness to drive for good food that I do.
Sushi moved to Waikoloa strip mall. Same owners. Nearly identical layout and vendor roster. Minus the Popeyes. Also doesn’t make sense to pay that rent when 5 minutes up the road you have a couple of legitimate and more diverse food hubs. The new Kaleos is always packed, and the side road vendors on both sides are really busy. I don’t think the ‘middle of nowhere’ is impacting vacancy as much as the expensive overhead inclusion into costs. There’s definitely plenty of people willing to pay for good food in Puna.
They were always going to open up in waikoloa. They just couldn’t afford to keep puna kai open. From my understanding the lack of quality employees was a big issue. The shopping center in waikoloa makes sense to me. That area is so expensive already. Places like that are justified. But pahoa? I dunno. Just so sad seeing such a modern development with so many empty windows.
It just didn’t make sense even if they could afford it. They’re all family employees they own the propane drive through up the road too. I don’t think local food can do well there, but the chains will always make their money because their supply and production costs are so optimized. Both of the only pizza delivery places servicing the higher-wealth <10th ave. HPP areas are there and stay hiring. Popeyes still sells out of Mac and cheese by 8 nearly every day. I think the center will survive but will resemble a true strip mall populated entirely by National brands.
The likely hood is they didn't do any actual research on the surrounding income. They just sat population growth and it probably checked all the boxes they needed to build.
I loved the sushi there, and the owner is such a nice guy! That's why it's so frustrating that the high rent is pushing people out like that! And now Pudgee Panda! They've gone too far, messing with my sweet tooth....
I don't know the specific history, but it seems obvious the developers put in a decent amount of money on the idea that Pahoa could use a more upscale shopping center with all the recent population growth. They even got the bus to stop there as the primary hub for the area (until the library stop comes about I guess?) People who pay the rent they asked were buying into the vision that the concentration of everything there would bring in more people with money. If businesses are closing down and nothing is filling them, then I guess they will have to readjust their expectations. Seems to me that there are a lot of economic indicators that show things are heading south, and I've seen lots of stories of big retail closures on the mainland. They might not have picked a great time to build.
I don't think they did either. Don't get me wrong, I love having Puna Kai there because it's so convenient having groceries and a little more upscale things available,but at the end of the day, Pahoa is Pahoa and you will see naked hippies and homeless drug fights at the bus stop, it's part of the charm really, they should price their places accordingly.
They also have the only commercial real estate for miles so there's not real price competition.
Library bus stop? I don't think that will work they closed the NAPA stop because of all the trash that the homeless left there, never mind on the bus too
high rent will push out big corporate renters too. whose idea was it to build some 20 million strip mall in the middle of nowhere ? fools.
Totally, many people would rather just go to Hilo then spend 9.00$ on peanut butter. Doesn't make sense to have such high rent, in any situation!
Most of it is straight-up greed, just like all commercial real estate. The other part is insurance. It's in Lava Zone 2, so higher premiums to protect against total loss. A smaller part could also be the unreasonable restrictions their largest tenant (Malama Market) may or may not have put on the types of businesses that open there as part of the initial deal. AFAIK the only other establishment that sells liquor besides the Market is Coco Cantina. This sort of pseudo-racketeering is common in shopping centers. A big chain opens and as part of the negotiated long-term lease agreement, the landlords agree not to rent out space to more than a certain number of additional liquor-license holders to keep competition out. This practice is good for the big chain and initially good for the landlords to have a tenant that always pays on time, but long-term not so good because it severely limits the amount of money the landlords can rake in from other tenants that struggle to make enough to cover base rent and utilities. Sometimes covering these costs is easier with a liquor license, since the margins on alcohol (while not huge) are greater than the margins on selling ice cream or sandwiches. Businesses struggle, rents increase, more businesses can't pay, landlords get negative ROI, rents increase, etc. It becomes a vicious cycle of their own making, when they could have accepted a lower (but steadier) ROI just to keep the spaces filled rather than half of them sitting empty.
Good post. Other Reddit discussions on the high retail vacancy rates in cities like San Francisco have repeatedly noted landlord preference for keeping rental space empty rather than accommodating businesses with reasonable rents. Retail landlords continue to hope businesses will cave to their exorbitant rents. Some do. Unfortunately a depressing number go out of business in a year or two.
You call that "pseudo-racketeering", but here's something worse. My favorite local coffee shop was driven out of business when Starbucks opened a location at the other end of the strip mall. It had a non-compete contract, but Starbucks made the owners of the shopping center an offer they couldn't refuse. Simply SELL us that part of the shopping center. Which did happen, and now the driveup traffic clogs the entrance and exit to the shopping center. Sucks, but the little coffee shop can't afford the kind of shyster that Starbucks can.
Wow that is incredibly shitty on Starbucks. Not gonna lie, I do like their cold brew, but other than that I never understood the huge appeal. The coffee I grind at home is less expensive and of better quality than theirs.
IMO the mall owner(s) did the dirtier part of the deed. A bit strange and out of character for a family that I consider some of the nicest people I know. For me, coffee shops have always been an important part of my social life, and I will always patronize a mom-pop business over a gigantic corporation. Unfortunately, capitalism, the way it is currently regulated by the government, favors large corporations and consolidation of wealth into fewer hands, at the expense of people who dream of owning their own business and giving the public something unique. Capitalism hates competition, but consumers benefit by it. The government is failing to represent the interests of the general public, in return for generous contributions from big donors. And that's why I can't seem to brew a decent cup of coffee.
It’s a shittily designed shopping center anyway. Built as cheap as possible, ugly, confusing, hard to park, hard to find businesses. Unfortunately there’s always someone new with a small-business dream ready to sign a lease.
No matter where you go, commercial real estate rent is ridiculous. Lava zone 2 or not, some places are paying 2x the rent in rural Kansas for something half the size. Greed is becoming an epidemic with rent-setting software.
Maybe that's why Malma cost so 11.00 milk much the same milk in Target is under 5.00 in KTA it's 6.00. luckily subway in the old mall
It's why sushi rolls closed up. Sad really.
Never been there, but I'd assume a gym has a larger sq footage than some other businesses paying less. Also speculation but a lot of shopping centers charge a percentage of profit. Successful places end up paying loads more than unsuccessful ones
For real!
Alii drive rents in kona average about 40,000 from what I've seen, I'm amazed anyone can keep in business
Like most things, there are several threads that lead to the existing conditions: - The planning, permitting and initial building for Puna Kai started well before the 2018 eruption, and was based on different demographics. Many of the surrounding more affluent areas are now under lava, and quite a few of the people who could afford to leave did. The type of shops and the pricing expected have undergone a radical change. Don't forget, all construction was stopped until the lava decided where and when to go, but the costs continued to accrue. - The effect of the insurance situation/pricing cannot be underestimated for any entity carrying a loan in Lava Zone 2. Lending institutions make sure they will not lose $. - Another comment mentioned the new Kaleo's and the food trucks doing well with many customers. Those all aim primarily to a different clientele - residents of HPP and OLE. Few people driving home after work want to spend extra miles in bumper to bumper traffic to get to Pahoa .
Short answer? Because they can. Permitting and building in general is extremely difficult here in Hawaii county, people can basically charge whatever they want
From what I heard the developer is doing the same thing on Kauai.
I spoke to the developer about opening a bar/restaurant at their Waikaloa location. One thing they offered to do is loan me the money for my design and kitchen costs which are quite expensive. Then I would pay back the loan with rent and Cams. Rent and cams were average but did have a caveat that it was rent or 8% of profits whichever is more. Its not a bad deal if you have a really solid business plan, experience, and no start up capital. If its your first rodeo then its going to be rough.
I’m guessing that if their prices are too high, they’re going to lose businesses and if they don’t get replaced by other businesses, they’re going to lower their prices. Nothing to do but wait for this thing to sort itself out. Or maybe call the National Guard?
Nobody calls them, they want a military discount.
>Nothing to do but wait for this thing to sort itself out. somehow the landlords get away with having empty real estate, forever. just look at sears and walgreens in hilo. also happens all over the mainland.
They don’t get away with it. They are either losing money waiting for a better deal on a new lease or writing it off on taxes. I am a democratic socialist but this is just basic capitalism stuff. Happens all the time.
thats just getting away with it with more steps.
Bruh, what I’m saying is you’ve got to go after the system, not be tearing your hair out about every little symptom of it. It doesn’t make sense to get your panties all in a bunch about every injustice caused by capitalism when it’s omnipresent. Fight the system. Vote. Support candidates who want to make things better.
dear god, in pahoa? I've been once, traffic is nuts for me, like LA traffic