Manager & President's Report

February 26, 2008

Dear Owner's and Rental Agents,

• Enclosed are pictures of the 50' boat that ran aground in front of the Waikiki Shore
• We have completed 18 storage rooms out of 25 and hope to have them all done by the end of summer.
• The dates and times for the Annual Homeowner's Meeting are as follows:

ATTENDANCE LIMITED TO HOMEOWNERS ONLY MEETING:

Date: April 26, 2008

Time: 9:30 am check-in. Meeting to follow at 10 am.

Where: Halekulani Hotel Ballroom 1 (2nd floor - oceanside)

Reception: Heavy Pupus, Cash Bar

Date: April 26, 2008

Time: 5:30 pm to 8:30 pm

Where: Halekulani Hotel Hau Terrace (2nd floor)

RSVP to Linda at 923-7245 or out of state owners 1-800-922-2161 by March 26, 2008

• There has been a lawsuit filed against the AOAO by Theresa Jones, apt 215, regarding the use of parking stall #13. The Board believes there is no merit to the suit and intends to vigorously defend the assets of the Waikiki Shore Apartment Owners.

ALOHA,

Rich Elliott - President, Board of Director

Michael Mullaney - AOAO Manager

808-923-7245

Treasurer's Report

Dear Owners,

In 2007 your Board approved the installation of High Speed Internet access at a cost of $24,000. There are some programming issues. The AOAO pays the monthly expense of $583 for this access with NO additional Maintenance Fee increase to the owners. Maintenance Fees have not increased in nearly 15 years.

The income generated from the 1st floor rentals is now $55,000 per month. In 2007, the AOAO collected $567.496 in income from the 1st floor merchants. We continue to do well in this area.

The AOAO is researching the cost to replace our aging Cable TV lines and service with Satellite TV. This upgrade would bring us into the 21st Century with the advent of HDTV with more and better quality programming.

The building Emergency Generator is operational and will help to maintain essential operational building requirements in case of a power outage.

In 2008 we will replace the garage sewer drainage pipes at a cost of approximately $30,000. These 48 year old lines are in bad shape and replacement is necessary.

Even though our insurance costs increased considerably in 2007, especially in Property, Flood and Worker's Compensation categories, and is currently about $120,000 per year, the Association is in excellent financial condition with $294,870 in Cash and Reserves going into 2008.

Sincerely,

Ted Simon
Treasurer - Board of Director

Other News From Hawaii

The Royal Hawaiian Hotel is about to begin a restoration. Plans are in progress to close the hotel for seven months on or around June 1, 2008 and reopen in late 2008.

Construction on the Trump Waikiki Hotel is up to the 11th floor. Completion is scheduled for August, 2009.

The Royal Hawaiian Shopping Center will be the new home of Hilo Hattie's 29,000 sq. ft. flagship store when it relocates to Waikiki in the early summer of 2008. The two-level store, occupying the first and second floors with direct access from Kalakaua Avenue, will further enhance the $84 million revitalization that is taking place at the Center.

Jimmy Buffett plans to open a restaurant in Waikiki. Expect occasional appearances by singer/author Jimmy Buffett at a new Waikiki restaurant that will bear his name and is expected to open later this year on Kalakaua Avenue in the Ohana Waikiki Beachcomber. It will be known as Jimmy Buffett's At The Beachcomber and will occupy a prominent location on Kalakaua Avenue above Macy's on the hotel's lobby level.

50' Boat Runs Aground in Front of Waikiki Shore

Photo courtesy: Clarence from Beach Boy Hale