Commercial Real Estate

Denver company to purchase Hotel Hana-Maui

A Denver-based real estate investment and development company plans to enter the Hawaii market with the purchase of the Hotel Hana-Maui & Honua Spa, an award-winning luxury property located on Maui’s eastern coast.

Amstar Group LLC said yesterday it expects to take possession of the AAA Four Diamond Award property in May after its deal with the current owner, Ohana Hotel Co., closes for an undisclosed amount. An Amstar subsidiary, Green Tea LLC, will take over management of the iconic 70-room hotel, which opened in 1946 and earned numerous industry accolades last year, including two Travel + Leisure Magazine “World’s Best Awards.”

“We are choosing to invest in the Hotel Hana-Maui because we recognize Hana as a special place,” said Joy Berry, president of Green Tea LLC. “Our efforts will be focused on travelers who have an interest in ‘doing,’ offering them a wide variety of activities and providing them with a memorable experience in a memorable place.”

Approximately 200 hotel workers, some of whom are represented by the Unite Here! Local 5 union, were notified in January that they could lose their jobs as a result of the asset sale. A spokeswoman for the company said workers will be laid off by Ohana when the deal closes and will have to reapply for jobs with Green Tea, which will host an employment fair for displaced workers and community job-seekers in the next few weeks. However, Amstar’s immediate repositioning strategy will reduce jobs by eliminating positions and outsourcing.

“A change in the existing operational model is critical to turning the hotel around and into a viable operation,” Berry said.

The fate of the hotel, which had gone on the market for between $60 million and $70 million in 2007, had been uncertain for some time. Owners took it off the market in the summer of 2008 when the national credit crunch and global downturn went into full throttle, and San Francisco-based Passport Resorts LLC, the property’s minority owner, sold its stake at the beginning of last year to a majority group of California investors in Ohana Hotel. In the last year or so, Hotel Hana-Maui, along with many other neighbor island properties, had seen occupancy drop between 25 and 30 percent.

State Sen. J. Kalani English (R, Hana-East and Upcountry Maui-Molokai-Lanai-Kahoolawe), whose first job was at Hotel Hana-Maui, welcomed Amstar to Maui.

Although Amstar is new to Hawaii, its $2 billion portfolio includes a mix of office, multifamily and hospitality holdings.

“All of Hana has experienced the uncertainty surrounding the Hotel Hana-Maui’s financial condition, and I think we are all extremely satisfied with the plans we have seen for the hotel’s future,” English said.

Although hotel jobs will be lost under the new ownership model, English said following a meeting with Amstar executives that he is “comfortable that they intend to be good corporate neighbors and focus on having a positive impact on our community.”

Source:  SB

A&B Properties Acquires Kailua-Kona Shopping Center

Acquires Favorably Priced, Well-Located Center with 1031 Proceeds

HONOLULU, Apr 12, 2010 –A&B Properties, Inc., the real estate subsidiary of Alexander & Baldwin, Inc.(NYSE:ALEX) (“Company”), announced today that it has acquired Lanihau Marketplace (“Lanihau”), an 88,300 square-foot neighborhood shopping center in Kailua-Kona, on the Big Island of Hawaii. A&B Properties previously sold the center to its current owner in 2006. The Lanihau acquisition represents the Company’s third improved property acquisition in Hawaii, and sixth overall, in the past 12 months.

“We continue to take advantage of favorable market conditions to expand our Hawaii improved property portfolio with the acquisition of Lanihau Marketplace,” said Norbert M. Buelsing, president of A&B Properties. “We sold Lanihau at a good point in the market cycle, but we’ve always liked the center. Lanihau remains a very popular shopping destination for the Kailua-Kona community – as demonstrated by its 99 percent occupancy and strong, stable long-term tenants, including Sack N Save, Longs Drugs, Bank of Hawaii and American Savings – and we are fortunate to have this opportunity to add this property back to the portfolio.” Lanihau was acquired in a 1031 exchange transaction, using proceeds from earlier dispositions.

Located along the Big Island’s west coast in the heart of Kailua-Kona’s regional retail center, Lanihau is ideally situated at the intersection of Queen Kaahumanu Highway and Palani Road, one of the busiest intersections in Kona.

With the acquisition of Lanihau, A&B Properties’ commercial property/investment portfolio consists of 8.4 million square feet of retail, office and industrial space located in Hawaii and eight U.S. mainland states. Additional information about A&B Properties, Inc. may be found at its web site: www.abprop.com.

About Alexander & Baldwin: A&B is headquartered in Honolulu, Hawaii and is engaged in ocean transportation and logistics services through its subsidiaries, Matson Navigation Company, Inc., Matson Integrated Logistics, Inc. and Matson Global Distribution Services; in real estate through A&B Properties, Inc.; and in agribusiness through Hawaiian Commercial & Sugar Company and Kauai Coffee Company, Inc. Additional information about A&B may be found at its web site: www.alexanderbaldwin.com.

Statements in this press release that are not historical facts are “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement.These forward-looking statements are not guarantees of future performance.This release should be read in conjunction with our Annual Report on Form 10-K and our other filings with the SEC through the date of this release, which identify important factors that could affect the forward-looking statements in this release.

SOURCE: A&B Properties, Inc.

Planet Hollywood will close in Waikiki

Planet Hollywood will close its last Hawaii restaurant April 18 when its lease expires at the Bank of Hawaii Waikiki Center.

The restaurant, which opened in June 1995 at 2155 Kalakaua Ave., is in the process of looking for another Hawaii location. It has 72 employees.

“Honolulu has been very good to us these past 15 years,” said Robert Earl, Planet Hollywood founder and CEO, in a prepared statement. “I have appreciated the opportunity to serve our guests and look forward to returning to the market in spectacular fashion in the near future.”

Planet Hollywood closed its Maui restaurant in Lahaina about 10 years ago.

The restaurant chain will still have a presence in Hawaii. Planet Hollywood International Inc. bought the Buca di Beppo chain in September 2008. Honolulu has a Buca Di Beppo restaurant in the Ward Entertainment Center.

Source: PBN

Industrial Vacancy Rate Highest Since 2002

The vacancy rate for industrial properties in Hawaii in the first quarter of 2010 rose to its highest level since early 2002, according to a new report.

Average asking base rents, meanwhile, declined over the past year to $1.02 per square foot per month, which is even with the asking rents at the end of 2005, according to the industrial market report from CB Richard Ellis. Sales of industrial properties were sluggish, the report said.

The statewide vacancy rate for industrial property was 4.4 percent during the first quarter, an increase of 1 percentage point from the year before, the report said.

That reflected 2.45 million square feet of vacant space out of a total of nearly 56 million square feet of net rentable industrial space on Oahu, the Big Island, Maui and Kauai.

The bulk of the vacant space was on Oahu, where there is 2.15 million square feet of vacant area, most of it in Kalihi, Waipio, Waipahu, Kapolei and Campbell Industrial Park.

Source: PBN

Local Developer Donates 300 acres to Kamehameha Schools

Developer Jeff Stone has donated 300 acres of land to Kamehameha Schools and the state Department of Hawaiian Home Lands for massive projects that are expected to transform the Leeward coast.

Kamehameha, the state’s largest private landowner, expects to invest $100 million to build an educational complex on approximately 70 acres of vacant land. It will be called the Stone Makaha learning complex and likely consist of a multi-generational learning campus for children and their families.

Possible elements could include a community service center, as well as a performing arts center, learning hall, taro patch and indigenous gardens.

Meanwhile, DHHL plans to develop a new Hawaiian homestead community — estimated between 400 and 600 homes — on the 230 acres adjacent on three sides to the Kamehameha parcel.

Over the course of development, the project is estimated to cost several hundred million dollars, according to DHHL spokesman Lloyd Yonenaka.

Construction of the educational campus, which will occur in phases, is expected to begin in 2012. Build out of the Makaha project is projected to take 15 to 20 years.

Source: PBN

Bishop Square up for sale

Bishop Square, one of downtown Honolulu’s largest office building complexes, is for sale.

The two towers that together measure 920,000 square feet are being marketed by New York-brokerage firm Eastdil Secured LLC.

The property, owned by Northwestern Mutual and the California Public Employees’ Retirement System, was put on the market last month in an open-bid process.

Based on the typical $225 per square foot price for downtown office buildings, the value of the property could top $200 million.

Industry insiders expect Hawaii office giants The Shidler Group and Douglas Emmett Inc., the largest office building owners in Honolulu, to be the primary bidders for the property.

The property includes the 30-story American Savings Bank Tower — formally known as Pacific Tower — built in 1972, and the 28-story Pauahi Tower, which was completed in 1983. Calls to The Shidler Group and Douglas Emmett weren’t returned.

The property at 1003 Bishop St. has approximately 200 tenants.

Source: PBN

Honolulu office landlord names new CEO

Pacific Office Properties Trust Inc. (NYSE AMEX: PCE), Honolulu’s largest office landlord, has named co-founder James R. Ingebritsen president and CEO.

Ingebritsen, who also was appointed to the board, is a major shareholder as a partner of The Shidler Group and owner and director of the company’s external adviser, Pacific Office Management Inc.

He is credited with having a major role in the creation of the company through a reverse merger in 2008. He later served as executive vice president of capital markets/operations, responsible for maintaining debt and equity relationships and overseeing the company’s western region.

“As a major shareholder and co-founder of the company, Jim’s interests are uniquely well-aligned with those of our shareholders,” board Chairman Jay Shidler said in a prepared statement Monday.

Shidler has been interim president and CEO while a search was under way for a permanent replacement for former President and CEO Dallas Lucas, who left the company at the end of his employment term, which expired on Aug. 31, 2009.

Ingebritsen joined The Shidler Group in 1987 and was assigned to its San Diego office where he became vice president and later chief financial officer. During that period, he led the southwest region’s asset management division, overseeing acquisitions, property management, leasing and the financial reporting staff.

He was named a partner of The Shidler Group in 1996, leading the acquisition, financing and disposition of more than $4 billion of commercial real estate. The REIT, which was formed in March 2008, derived most of its $72.6 million in revenue last year from its seven properties in Honolulu, one of the healthiest office markets in the United States.

Source: PBN

Queen Emma Bldg. to be sold at auction

A vacant 12-story downtown Honolulu office building known for its pimply facade will be sold in a foreclosure auction early next month

The principal investor in the Queen Emma Building, physician Armand Behpour, filed a foreclosure lawsuit against the entity that owns it, Queen Emma LLC, on Sept. 21, 2009.

The foreclosure was granted on Feb. 17. Attorney George Van Buren, who was appointed commissioner, has scheduled the auction for April 6 on the steps of 1st Circuit Court, and is holding open house on the next two Sundays.

The amount owed on the first mortgage is about $1.5 million in principal and interest, and the amount of a second mortgage is about $6 million in principal and interest

The 80,918-square-foot building was in foreclosure when Behpour and Queen Emma LLC bought it from its former owner, Randal Galijan, in May 2006 for $7 million. The owners had put the building on the market for $14.5 million two years ago, but there were no takers.

Various plans through the years called for using the structure, which is behind the Capitol Place condominium high-rise, as a college dormitory.

Lenders take over Turtle Bay Resort

Turtle Bay Resort on the North Shore is now owned by a consortium of investment management firms.

The consortium are various lenders to the property, including Wells Fargo & Co. and Credit Suisse. The foreclosure settlement has ended, since the lenders have taken the deed of the property from its former owners, Los Angeles-based Oaktree Capital Management LP.

The group’s new ownership begins today. The property has 443 rooms, two championship golf courses, a spa and other resort amenities.

“Turtle Bay Resort and the new ownership group are committed to the community of the North Shore,” said Stanford Carr, local real estate developer and acting interim management officer. “We intend to maintain this special property at the highest level and preserve the environment. Everyone has worked to facilitate a seamless transition for the property, its employees and guests.”

Carr said the hotel will operate “business as usual,” and the name and logo will not change.

Carr was selected in 2008 by lenders to sell the property as part of a foreclosure settlement with owner Oaktree Capital Management LP.

Last year, Gov. Linda Lingle proposed that the state purchase the 850-acre resort to preserve the landscape from further development. The lenders rejected the offers last year.

General Growth rejects Simon’s $10B offer

General Growth Properties Inc., owner of Honolulu’s Ala Moana Center, has rejected a $10 billion offer to sell to rival Simon Property Group.

But the nation’s second-largest mall owner did not reject outright Simon’s overtures and indicated it would consider being acquired as part of its efforts to emerge from Chapter 11 bankruptcy protection. Indianapolis-based Simon is the nation’s largest mall owner.

General Growth CEO Adam Metz, in a letter to rival Simon CEO David Simon, said the company remains committed to restructuring its debt but will not allow Simon to derail that process.

Metz said Simon’s offer “is not sufficient to preempt the process we are undertaking to explore all avenues to emerge from Chapter 11 and maximize value for all the company’s stakeholders.”

Chicago-based General Growth made the letter public in a press release issued Tuesday evening in response to Simon’s decision to publicize its acquisition offer. General Growth filed for bankruptcy protection in April 2009.

Simon, which owns the Waikele Premium Outlets on Oahu, said Tuesday it has offered to acquire General Growth for $10 billion, including $9 billion in cash. The offer would give General Growth creditors $7 billion in consideration.

Shareholders would get more than $9 a share, including $6 a share in cash.

General Growth owns or manages more than 200 regional shopping malls in 43 states, including Ala Moana Center, Ward Centre, Ward Entertainment Center and Ward Gateway Village in Honolulu and Prince Kuhio Plaza in Hilo. The company also manages Windward Mall on Oahu; King’s Shops at Waikoloa Beach Resort and Queens’ Marketplace on the Big Island; and Whaler’s Village and Queen Kaahumanu Center on Maui.

Source: PBN

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