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Frederick V. Burgart, Realtor

P O Box 1921
Wailuku, Maui, Hawaii 96793

OFFICE: 1-(808)-242-7249
FAX: 1-(866)-451-2365
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Frederick V. Burgart,

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Papakea Beach Resort,
Latest Newsletter

PAPAKEA

ROUND-UP

July  1, 2014

By: Fred V. Burgart (PB)

Frederick V. Burgart, Realtor

Aloha Papakea Owners & Future Owners,

Hope everyone is enjoying their summer. The first half of the year has passed quickly. We enjoyed one of the wettest winters in 10 years earlier this year. Once the  rains subsided in May, it dried out our once lush, green West Maui  Mountains. Tourism has been good. I can't say it'll be a record breaking year, but is seems busy as ever. This  summer season is in full swing now with mostly the West Coast crowd. Look me up when you are here on Maui. The Annual Owners Meeting is Saturday, September 27th.

2ND QUARTER SALES STATS & MID-YEAR SALES STATS

During the last 3 months we had 2 closed sales, bringing our half-year total to 5 closed sales. As you can see, it's been a little slow. Last year at this time we had 8 sales, so we're a little behind last year. What's really falling behind are the pending sales: we have only one unit  pending in escrow at this time, whereas last year we had 7 units pending. Currently there are 10 units offered for sale, which has been the norm for this year. Oceanview one bedroom #B-105 recently sold for $415,000 (FS). That's $50,000 over the pervious oceanview one bedroom sale. So, there are some encouraging signs that are showing increasing values in most categories even though sales have been few and far between this 2014 year.

JUNE BOARD MEETING

The BOD meeting was held on June 20th in the upstairs AOAO meeting room. I missed this meeting, so don't have anything to report. I have been attending the BOD meetings since 1988 when I left my job as Papakea's first bellman. There is no bellman now but I had lots of fun and met lots of owners during my 10 years of working at the Papakea from 1977 to 1988. This all led me to obtaining my real estate license in 1982 and I have continued to help the owners in their real estate needs ever since.

FEE SIMPLE UPDATE

As reported in my April newsletter, the unsold 31 fee interests  were sold to a 3rd party investor. This 3rd party  investor is a profit sharing fund (named Medusky & Co.) which plans to hold on to these leases for the long term investment. I talked with the  person in charge and they really don't want to sell any of the Fee Simple interests. But on the  other hand,  they don't want to hold the Papakea owners hostage either by  not selling the fee interests ever again.

The owner of J-303 (which  is a two bedroom on the market) offered Medusky & Co. $300,000 for the fee interest and they accepted that bid. (This owner could have bought  the fee interest earlier this year for $150,000). So, the offer seems very high. The downside  of the J-303 owner's offer is the fact that Medusky & Co. are going to use this offer as the benchmark for future sales which  means those 31 leasehold owners wanting to buy their fee simple interest are going to pay an extraordinarily high price for the future sales. It looks like it  will now cost up  to $200,000++ for a one bedroom fee interest. Basically, the J-303 owner's offer unfortunately put the cost of the fee interest behond what it should be. It's going to make far more  sense to buy one of the Fee Simple units.

There is also a lawsuit that has been filed by a 4th party investor against the BOD and Medusky & Co. claiming it wasn't given the opportunity to purchase the fee interests that Medusky & Co. had bought. Medusky can't sell any of the fee interests until this lawsuit is resolved. For right now, no  one can purchase the fee interest. When Medusky & Co. does ever sell anything, there  won't be an  'offering' , they will take offers on a case by case basis.

MY WEBSITE: if you are looking for updated information regarding Papakea, please search my website for all the latest info on sale,  listings, & cost of ownership.  You can always drop me a note for any questions you may have.

Aloha & Mahalo,

Fred