Retail

Castle & Cooke sells prime site with long term lease to Home Depot

Texas company buys prime site from Castle & Cooke

Castle & Cooke Hawaii quietly sold a prime plot of land in Honolulu — specifically, the nine acres on which sits the Home Depot store in Iwilei — to a Texas company for $23.2 million this summer.

The buyer, identified in the deed as HD Hawaii 421 Partnership Ltd. of Houston, is said to have been interested in buying the property for several years.

Castle & Cooke marketed the property several years ago, and ultimately sold the land at 421 Alakawa St. fee simple to the HD Hawaii partnership, whose president is Howard B. Chapman.

No word on how interested Home Depot might have been in buying the land underneath its Iwilei store, which opened in 1999. Home Depot’s long-term lease on the property runs through Jan. 31, 2025, according to the deed. No real estate brokerage firm represented the seller or buyer.

At $23.2 million, the sale ranked No. 7 on PBN’s commercial real estate transactions list, which listed the biggest deals closed between July 1, 2009, and June 30, 2010.

“It’s a really big deal because there just hasn’t been much out there and my guess, though not knowing the buyers, they probably own some other Home Depots on the Mainland or felt comfortable with the tenant to make the deal,” said Steve Sofos, president and CEO of Sofos Realty Corp., who was not involved in the sale. “I think [the sale] is surprising because I always thought that for Castle & Cooke, that was one of their crown jewels.”

Source: PBN

Hawaii Commercial real estate market shows signs recovery

Oahu’s commercial real estate market is showing signs of recovery, but it could take at least another year before it is back on firm footing.

That’s the assessment of leaders of three large Hawaii commercial real estate companies as the industry moves into the final five months of the year. With commercial real estate taking a beating as Hawaii and the rest of the world struggled to survive the global recession, industry leaders here believe that the worst is likely over and recovery is on the horizon.

The impact of the financial crisis is evident in the dramatic decline in commercial real estate transactions over the past four years. In the first quarter of 2006, there was $1.4 billion in transaction activity, 88 percent higher than the first quarter of this year, said Mike Hamasu, consulting and research director at Colliers Monroe Friedlander.

“Financing is the lifeblood of the investment market,” Hamasu said. “If you can’t get money to purchase or develop your properties, it makes it very difficult to move forward on hardly anything.”

But he said there are signs that the commercial real estate industry is improving.

The industrial and retail markets are stabilizing, with retail vacancy rates hovering around 3 percent. Hamasu said there appears to be increased interest in real estate investment, but office market vacancy remains about 4 percentage points higher than it was two years ago.

Hamasu said he’s optimistic that the worst is over, but said it will take a while before the recovery is complete.

“We’re starting to see a slow transition from a market that’s been fairly devastated to one that’s starting to consider real estate as an opportunity,” he said. “The optimistic people are saying the bottom has hit, but the pessimistic ones are saying we haven’t had enough proof yet to say that.”

Steve Sofos, CEO of Sofos Realty, agreed that commercial real estate activity picked up in the latter part of 2009 into early 2010, but he said the market is still flat. He said he believes this trend will continue through 2011 because of the long-lasting impact of the recession.

“The problem is there is no pent-up demand in the office market, there’s no pent-up demand in the industrial market, there’s no pent-up demand in the retail market,” he said.

He said one solution would be for landlords to adjust their lease rents to make them more affordable and attractive to small businesses. He said owners need to decide if they want to maintain rents, but deal with vacant property, or lower rents and have an income from their tenants.

“The smart landlords are wheeling and dealing to get tenants,” Sofos said. “The bad ones are sitting there and holding their prices.”

Joseph Haas, president and senior managing director of CB Richard Ellis, said the commercial real estate market in Hawaii is “fundamentally strong.” He said there still is some softening in the office market sector in Honolulu, but that the retail market is tightening and the industrial market has bottomed out.

Haas said he believes the worst is over for the industry, although he acknowledged there still is a lot of uncertainty. The key, he said, is the need for marked improvement in the Hawaii job market.

“We haven’t had job growth, which directly affects commercial real estate,” he said. “You don’t need to expand your office if you’re not bringing new people on. We won’t know we’re out of the woods for sure until we see positive job growth.”

He added that one positive sign that commercial real estate is on the rebound is the recent purchase of Bishop Square by Douglas Emmett Inc. The California-based real estate investment trust bought the downtown property for almost $230 million.

“If you want to make a statement that the commercial real estate industry is strong in Hawaii, that’s putting your money where your mouth is,” Haas said. “There’s only one Bishop Square, unfortunately. But they are a Mainland real estate investment trust who believes in our market and the future of our market.”

Source: PBN

Waikoloa Highlands Center for sale $19.9M

Waikoloa Highlands Center on the Big Island is on the market for $19.9 million.

The neighborhood shopping center, measuring 73,524 square feet, has 43 tenants and is anchored by Waikoloa Village Market, a subsidiary of KTA Super Stores.

Owner 3-D Investments of California has traded offers with four prospective buyers, according to property broker Mark Bratton, who expects to sell the shopping center this summer.

Other tenants include Chevron, First Hawaiian Bank, Hawaii Family Dental Center and Subway, as well as a number of doctors and dentists.

The center is 76 percent occupied, even though Hilton Grand Vacations left a significant amount of space vacant after consolidating operations about 18 months ago.

Source: PBN

Waikiki Retail Building For Sale Fee Simple

The Waikiki building that is the home to the wildly popular eatery Eggs ‘n Things is on the market for $6.2 million.

The building on Saratoga Road is part of a three-building complex totaling 4,705 square feet on a fee-simple parcel that measures 4,870 square feet.

It’s owned by real estate investor Jay Shidler and his business partner, Ronald Petty. CB Richard Ellis has the listing.

Eggs ‘n Things moved from its former home at 1911-B Kalakaua Ave. to the Saratoga Road site in November 2008 in part to be closer to its Waikiki tourist base, especially visitors from Japan.

The building’s other tenants include Hawaii’s Natural High.

Source: PBN

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

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

Stoneridge Capital Partners buys Mililani Shopping Center

A&B Properties, the real estate subsidiary of Honolulu-based Alexander & Baldwin, said Monday it completed the sale of the Mililani Shopping Center.

The sale of the 180,300 square-foot retail center, located in Central Oahu, was for $50.3 million in cash. The asking price was $55 million.

The transaction marks the entry into the Hawaii market for the buyer, Newport Beach, Calif.-based Stoneridge Capital Partners.

“Due to supply constraints within the local market, this shopping center benefits from both high occupancy levels and historically high rental rate growth, making it an ideal fit for our real estate investment strategy,” said CEO Greg Merage. “We will continue to leverage our strong cash position to seek out these types of investment opportunities and further expand our portfolio of commercial and multifamily assets.”

In a separate transaction, A&B Properties acquired the Meadows on the Parkway Shopping Center, a 216,400 square-foot retail center in Boulder, Colo., for $30.8 million.

“During our eight-year ownership of Mililani, we focused on marketing programs to increase customer traffic and invested in facilities upgrades to improve the property’s value,” said Norbert M. Buelsing, president of A&B Properties. “These initiatives resulted in a 39 percent increase in net rent and a 66 percent increase in average tenant sales, while maintaining a 98 percent average occupancy at the center.”

Mililani Shopping Center was built in 1976 and is anchored by Foodland Supermarket, Ross Dress for Less, 24-Hour Fitness, and food, retail and professional services outlets.

Alexander & Baldwin (NYSE: ALEX) is involved in ocean transportation and logistics services through subsidiaries, Matson Navigation Company, Matson Integrated Logistics, and Matson Global Distribution Services; in real estate through A&B Properties; and in agribusiness through Hawaiian Commercial & Sugar Company and Kauai Coffee Company.

Iwilei warehouse will house bakery, restaurants, stores

A giant warehouse in Iwilei that produced cardboard boxes for about 50 years is about to become more inviting to consumers as the home of a few new restaurants and retail stores, adding another piece to what has been a gradual upgrade of the historically industrial area.

The renewal plan for the former Weyerhaeuser box production plant at the corner of Nimitz Highway and Alakawa Street just makai of Home Depot is being driven by Thanh Lam, owner of the local Ba-Le bakery and sandwich shop chain.

Lam bought the two-story, 165,900-square-foot building in May with two partners for $20 million, and is aiming to complete renovations costing a few million dollars more by March or April.

CVS Purchases Two Star Markets Properties

The owner of Longs Drugs Stores said it has completed the purchases of two former Star Markets stores on O’ahu and will convert the stores in Mo’ili’ili and ‘Ewa Beach to Longs stores within the next two years.

The two Star stores were closed in recent weeks by Times Supermarkets, which bought Star’s seven stores earlier this year with the intent to rebrand five stores with the Times name and sell two to CVS Caremark, which operates Longs.

CVS yesterday confirmed it has purchased the two stores. The company also said the pharmacy business at the Star store in Kíhei, Maui, was transferred to a nearby Longs.

On O’ahu, CVS said it expects to renovate the Mo’ili’ili Star building and reopen as Longs in the next 18 to 24 months. The new store will replace an existing Longs store about two blocks away at 2220 S. King St.

A new Longs store in ‘Ewa Beach is expected to open in the second half of next year after a renovation of the former Star store at 91-919 Fort Weaver Road.

After the moves, CVS will operate 46 Longs stores in Hawai’i. The Rhode Island-based company acquired California-based Longs last year, and operates about 7,000 stores under the CVS pharmacy name outside Hawai’i.

In Hawai’i, CVS is facing heightened competition from its biggest rival, Walgreens, which opened its first store in the state two years ago and has a goal of opening 25 to 30 stores over the next several years.

Walgreens opened its fifth full-service store in Hawai’i last month. The company also operates a few smaller pharmacy-only stores, as does Longs.

Source: HNA

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