A Lessor Known Real Estate Investment

For Kamehameha Schools, being a ‘residential’ lessor for most projects on O‘ahu is not part of its long-term objectives. Kamehameha  School began its multifamily leased fee sales program in 1991, nearly two decades ago, selling directly only to lessees.  Prudential Locations has been retained to assist with sales of the remaining leased fee interest in hundreds of residential condominium units either to lessees or to investors. (The fee simple condominium apartment unit that is subject to a long-term lease is referred to as the “leased fee” or the “leased fee interest.”)

Investors have the opportunity to purchase the leased fee interest under specific condominium apartment units around O‘ahu, and assume the lessor’s position for those assets.

By purchasing the leased fee, you receive the benefit of lease rent income either monthly or semi-annually, and the ownership of the condominium apartment unit (land and improvements) at the end of the lease term. Pursuant to the lease contract, when the lease terminates or expires, you would own the unit in fee simple and the then lessee is required to vacate the unit. You should have the benefit of the fee simple market value of the unit at that time.

What types of investors would benefit from this opportunity?

  • Those that have a longer time horizon for their investment needs.
  • Investors who want to use real estate to transfer assets to children and grandchildren.
  • Those that would like to own one or more properties by using less cash up front.
  • Investors who want to diversify their real estate investment portfolio.

If you are interested in finding out more about leased fee investments contact us.  

About the Author

Brandon Lau grew up in Kailua and currently resides in Honolulu with his wife Andee and children Caylah, Elijah, and David. His eighteen years in real estate led him to become a Partner at ChaneyBrooks Choice Advisors. Over the past 10 years he has developed the team and systems that has created a high level of service and value for his clients.

What differentiates Brandon and his team is his consultative approach to real estate. He advises clients with relevant data and expert insight to help them make the best choices in real estate. Good choices in planning for long term dispositions, negotiating for the best price or knowing when not to pursue an investment are ways his consultative services will give you an advantage in the marketplace. His bottom line is providing service with the utmost integrity and expertise.