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Alexander & Baldwin buys three Hawai`i retail centers for $254m

Published 28 February 2018

Alexander & Baldwin (A&B) has acquired three retail centers Laulani Village Shopping Center, Hokulei Village Shopping Center and Pu`unene Shopping Center in Hawai`i.

A&B acquired the shopping centers from California-based Terramar Retail Centers, LLC, for $254 million, including the assumption of $62 million in mortgage debt.  The transaction closed on February 23, 2018.

A&B president and CEO Chris Benjamin said: "The acquisition of these three centers enables us to complete the strategic migration of our commercial real estate portfolio from the U.S. mainland back to Hawaii.

“This reinvestment in our local communities has been aided by our conversion to a real estate investment trust last year, and we are pleased to bring these important centers under local ownership.”

A&B chief real estate officer Lance Parker said: "All three of these centers are high-quality, newly constructed projects that provide convenience and value to their surrounding communities, much like the other centers in our Hawai`i portfolio.

“We are excited to work with our new tenants to help them succeed in serving their customers and neighborhoods, and we look forward to having these strategic assets in our portfolio attract new tenants to the islands."

Laulani Village, located in Ewa Beach, Oahu, is a new, 175,000 square-foot community retail center that provides A&B with a strategic presence in West Oahu, one of Hawai`i's highest growth markets.

Laulani Village is 95 percent leased and anchored by Safeway, Ross Stores, Petco and City Mill, and also features other tenants such as Buffalo Wild Wings, Teddy's Bigger Burgers, Starbucks and Panda Express.

Hokulei Village, a new neighborhood retail center, is located in Lihue, Kaua`i. A&B's first grocery-anchored retail center on the island, Hokulei Village is a 103,000 square-foot center that is 97 percent leased to tenants including Safeway, Petco, American Savings Bank, Chevron, Jack in the Box, Dominos and Panda Express.

Pu`unene Shopping Center, completed in 2017, is a 113,000 square-foot retail center in Kahului, Maui, collocated with the island's only Target store.

Existing and signed tenants include Ulta Beauty, Starbucks, Petco, Maui Tacos, Massage Envy, Planet Fitness and Verizon.

Terms of the Transaction & Mainland Disposition Program

The acquisition is expected to be financed primarily with proceeds from the sales of A&B's final mainland commercial real estate properties and the assumption of a $62 million mortgage.

Other asset sale proceeds and cash are expected to be used to finance the balance, or about 15%, of the acquisition cost.

The disposition of the Company's seven mainland properties commenced in the fourth quarter of 2017 and is currently expected to be completed by mid-2018.

Although the Company expects to realize an aggregate gain on the disposition of the remaining mainland commercial properties that will fund the acquisition, the Company's fourth quarter results included a net charge of $16.1 million due to impairment charges on three of the seven assets that were held for sale and under contract as of year-end, partially offset by a gain on a mainland property sold.

Since 2012, A&B has invested nearly $1.8 billion in Hawai`i, including $400 million of commercial real estate capital from assets across the U.S. mainland migrated back to the islands.

During this time, A&B also contributed more than $5 million to non-profit and community organizations across the state.



Source: Company Press Release