Pearl Highlands Center sells to firm for about $130M
The Boston-based real estate investment firm has long-term plans for center
Less than two years after it last changed hands, the Pearl Highlands Center has a new buyer.
AEW Capital Management, a Boston-based real estate investment firm, has bought Pearl Highlands for about $130 million from a Morgan Stanley fund.
The deal closed yesterday morning, with Eastdil Secured as the broker.
"We've been looking for some time," AEW principal Tom Mullahey said. "We believed it (Pearl Highlands) had strong market fundamentals, and that particular center is one of the largest centers on Oahu. It's located in a good in-fill and is an improving retail location."
New York-based Morgan Stanley acquired the 400,000-plus-square-foot center in December 2004 for $113.5 million.
Even then, $113.5 million was a considerable markup compared with the more than the $62 million that Chicago-based LaSalle Investment Management Inc. shelled out for Pearl Highlands in 2000.
"This deal fit what we're looking for," Mullahey said. "We're viewing this as a long-term hold."
Colliers Monroe Friedlander will continue to manage and lease the center.
AEW Capital Management LP will continue to look for other investment opportunities in Hawaii, according to Mullahey.
The firm, founded in 1981, manages more than $34 billion of real estate assets and securities on behalf of institutional and private investors. It has offices in London, Paris and eight other European cities in addition to an office in Singapore, which was established last month.
AEW's preferred investment size is between $25 to $75 million, and typical investment periods are between three to seven years.
STAR-BULLETIN / FEBRUARY 2005
THE PEARL HIGHLANDS DEAL
Sale price: About $130 million
Buyer: AEW Capital Management LP
Seller: Morgan Stanley Real Estate's Prime Property Fund
Size: 410,325 square feet
Location: 1000 Kamehameha Highway, Pearl City
Anchor tenants: Sam's Club, Regal Cinemas, CompUSA
Opened: 1993
|
|
Pearl Highlands opened in 1993 and is anchored by Sam's Club, Ross, Pier 1 Imports and Regal Cinemas.
CompUSA's recent move to Pearl Highlands from Waikele, as well as developments near the new Wal-Mart at Manana, are expected to boost the center's critical mass of shoppers.
Jamie Brown, president of Hawaii Commercial Real Estate, said CompUSA's move signifies a shift in the center of gravity of retail from Waikele to Pearl City.
New retail projects planned for the area include Pearl City Shops and Pearl City Gateway, a new shopping center by the Robertson Properties Group.
"Mainland institutional buyers see Hawaii's economy as being very strong and a safe, long-term investment," Brown said. "Now that they're here, it's safe for the next guys to come in. ... Institutional investors are used to selling to institutional buyers."
Local brokers agreed that the timing was good, given that the retail vacancy rate is near 3 percent, with rental rates continuing to head upward. Pearl Highlands is close to 100 percent occupied.
"The center's come a long way," said Steve Sofos, of Sofos Realty. "I'm not sure the tenant mix is the greatest, but it has lots of potential."