Auahi Street was still carrying traffic in July when crews cut a trench down its center and began threading electrical duct beneath the sidewalk. A few blocks away, Ward Centre sat shuttered after 44 years, waiting for demolition to clear the site for two towers named Melia and Ilima. Cranes stood over the Kalae condominium site. Construction vehicles worked the Akoa site. None of it looked like a neighborhood short on demand.
It wasn't demand that was the problem. Several of the towers rising around that construction were already behind the closing dates buyers had signed contracts against, and the reason had nothing to do with sales pace. Hawaiian Electric's Kewalo substation, the one that feeds most of Ward Village and the Kamehameha Schools-planned Our Kakaako district, had run out of room to serve new buildings. The fix is a four-phase infrastructure project that won't finish until 2028, and it is quietly doing more to set delivery dates in Kakaako right now than any developer's marketing timeline.
The Wires Got There Before the Buildings Did
Hawaiian Electric flagged this coming in a March 2023 filing with the state Public Utilities Commission, warning that forecast load growth in the Kakaako-Kewalo area could overload the substation's transformer and circuits as early as November 2025. The utility priced a conventional fix, a new transformer, switchgear, and additional circuits, at roughly $22 million, and said the equipment itself would take more than two years to arrive after ordering. Developers building in Ward Village and Our Kakaako later got the same message directly: the existing 11,500-volt lines serving their sites weren't sufficient, and 25,000-volt lines would need to be installed at the developers' expense before some buildings could be energized.
The clearest casualty so far is Pohukaina Commons, a planned pair of affordable rental towers, one with 431 units and one with 194, that state officials say could face a three-year delay and a $19 million cost increase tied directly to the power buildout. That is a state-backed project with its own construction budget and its own state agency coordinating the work, and it still couldn't get ahead of the queue.
What the Four Phases Actually Mean for a Closing Date
The upgrade Hawaiian Electric and the Hawaii Housing Finance and Development Corporation have documented in state filings breaks into four pieces, each tied to a different stretch of road and a different completion window:
Phase one upgrades the Kewalo substation itself, a new transformer and switchgear, with completion expected in early 2027. Phase two runs new duct from the Queen Street extension to Ala Moana Boulevard, built by Howard Hughes, targeted for late 2026 or early 2027. Phase three extends duct from Ward Avenue along Ala Moana Boulevard into the Our Kakaako blocks, threading Koula, Auahi, Cooke, and Coral streets to serve Kamehameha Schools properties, targeted for mid-2027. Phase four carries the final segment to the Pohukaina Commons site along Coral and Pohukaina streets, not expected until 2028.
If you're evaluating a pre-construction unit in Kakaako right now, the phase that touches your building's street matters more than the date printed on the purchase agreement. A tower fed off the phase two corridor near Queen Street has a real shot at its stated 2027 delivery. A tower sitting deeper in the phase three or phase four footprint is tied to infrastructure that won't exist until later, regardless of how finished the building itself looks. The industry term for the document that confirms a site has power is a "will-serve letter." Asking a sales office whether that letter has been issued, and for which phase their site depends on, gets you a straighter answer than asking about the closing date.
A Different Kind of Delay Next Door
Not every stalled Kakaako project traces back to the grid. The state's other high-profile Kakaako housing effort, a 99-year leasehold condominium tower planned for the corner of Ward Avenue and Kapiolani Boulevard, hit its own wall in early 2026, and it was a legal one. The Hawaii Community Development Authority had structured the pilot under a 2023 law that required owner-occupancy in perpetuity for every unit. When the developer, Ko Laila LLC, ran the numbers against rising construction costs, the restriction made the units too hard to sell, and HCDA froze presales rather than launch into a market it expected to reject the terms.
That changed in mid-2026. Governor Josh Green signed Senate Bill 2061, introduced by Sen. Stanley Chang, cutting the owner-occupancy requirement from perpetuity to 10 years and applying it only to the income-restricted share of the building. HCDA Executive Director Craig Nakamoto told Pacific Business News the project is "officially back on," with rulemaking starting in September and presales targeted for the first quarter of 2027.
The site itself is worth knowing: HCDA acquired the land, a 26,626-square-foot parcel currently home to a Jack in the Box and the Galiher Office Building, from Howard Hughes Holdings in January 2025 for the equivalent of $12.22 million against an appraised value of $15 million. The tower is planned for 370 units, 60 percent reserved for households earning at or below 140 percent of area median income (currently $212,800 for a family of four in Honolulu), and 40 percent sold at market rate.
What the Same Zip Code Costs Depends on Which Kind of Unit You're Buying
The reason this pilot is worth comparing against a fee-simple building next door is that it breaks the assumption that leasehold automatically means cheaper. It doesn't, once you separate the income-restricted units from the market-rate ones.
| Unit type | HCDA leasehold, reserved | HCDA leasehold, market-rate | Kahuina, fee simple |
|---|---|---|---|
| 1-bedroom | $368,100 – $644,700 | not offered at this tier | from $598,888 |
| 2-bedroom | $650,000 – $725,300 | $879,200 – $974,200 | from $692,800 |
| 3-bedroom | not offered at this tier | $957,300 – $1.21 million | from $839,900 |
| 4-bedroom | not offered at this tier | $1.33 million – $1.4 million | not offered |
Kahuina is the fee-simple project going up nearby under Stanford Carr Development as part of the Our Kakaako master plan, and its pricing gives a useful yardstick. The reserved leasehold units genuinely undercut it, which is the point of the income restriction. But the market-rate leasehold units, the ones with no income cap and no long-term ownership, price above the comparable fee-simple bedroom count at Kahuina. HCDA's own figures put the average full cost to build one unit in the leasehold tower at $740,000, on a total development budget of $279 million, and that construction cost shows up in the market-rate pricing regardless of the 99-year lease attached to it.
For a buyer weighing the two, the lesson isn't that leasehold is a bad deal. It's that the discount lives entirely in the income-restricted tier. A market-rate buyer choosing between a leasehold unit at this site and a fee-simple unit at Kahuina is not choosing between cheap and expensive. Both land in a similar range, and the leasehold buyer is paying it for a shorter, capped form of ownership.
That split shows up in the broader Kakaako numbers too. Over the three months ending March 2026, the median sale price in Kakaako ran $753,000, up 9.1 percent from the same period a year earlier, even as the median price per square foot fell 22.6 percent over the same span. Those two figures moving in opposite directions usually mean the mix of what's closing has shifted, larger and pricier new-construction units landing alongside smaller resale units, which pulls the median up while easing the per-square-foot figure on the older stock. It's a market absorbing two different products at once, not one uniform price trend.
Before You Sign
A few questions are worth asking directly of any Kakaako sales office marketing a pre-construction unit:
- Has the building received its will-serve letter from Hawaiian Electric, and if not, which phase of the Kewalo upgrade does it depend on
- If the unit is part of an income-restricted or leasehold program, what is the owner-occupancy term and does it apply to your specific unit or only the reserved tier
- How does the total price, including any ground lease or reserved-unit resale restrictions, compare to a fee-simple unit of the same bedroom count in the same corridor
None of these questions require a real estate license to ask. They just require knowing that in Kakaako right now, the sales center's calendar and the utility's calendar are two different documents.
Does this affect resale condos in older Kakaako buildings, or only new towers? The substation crunch is specific to new electrical connections for buildings still under construction. Resale units in completed towers are already energized and aren't waiting on the Kewalo upgrade.
Is the HCDA leasehold tower open to buyers relocating from outside Hawaii? At initial offering, all units, both reserved and market-rate, are restricted to owner-occupants. After 60 days, up to 40 percent of unsold market-rate units can be released to Hawaii state residents without the owner-occupancy requirement. The full eligibility rules were still being finalized through HCDA rulemaking as of this writing.
Will the 2028 completion date for the Pohukaina Commons duct segment push other projects further out too? The phases are sequential by geography rather than by project, so a building fed off an earlier phase, such as one near Queen Street or Ala Moana Boulevard, isn't automatically delayed by work still pending on the Pohukaina Commons segment. Each site's timeline depends on which phase serves it.
If you're comparing pre-construction units in Kakaako, or trying to figure out what a leasehold price tag actually buys against a fee-simple listing down the street, List With Fran Mag can walk through the specific building, the specific phase, and the specific numbers with you before you sign anything.