Pearl HighlandsA large Chicago real estate investment management company has bought the Pearl Highlands Center, Oahu's fifth-largest shopping mall, in a deal worth $62.36 million.
Center sold for
A Chicago firm says it plans
to make small, cosmetic changes
to the 420,000-square-foot mall
By Tim Ruel
LaSalle Investment Management Inc., which manages close to $21.5 billion in real estate assets worldwide, including the Maui Marketplace, closed on the fee-simple purchase of the Kamehameha Highway property yesterday, officials said.
"We'll be sprucing up the property," said Jim Garvey, senior vice president for LaSalle. "You have great tenants there."
The three-level shopping center, slightly larger than Kahala Mall, has 420,000 square feet and 26 tenants, including Sam's Club, Ross Stores, Old Navy Clothing Co. and a 12-screen Signature Theatres.
LaSalle hopes to fill one vacant 40,000-square-foot spot soon, Garvey said yesterday from Chicago.
LaSalle is looking to make small, cosmetic changes to the Pearl City mall within a year, but the company has not finalized plans, he said.
The seller, Pearl Highlands Center Associates, last month received a $946,500 building permit to alter the property before the sale, according to public records. The limited partnership had bought the 14-acre property for $26.5 million in 1990. The mall, developed for an undisclosed price by Japan-based Takenaka International Ltd., opened in 1993.
Shigeru Takayama, a local principal of the partnership, could not be reached for comment.
LaSalle is the investment arm of Jones Lang LaSalle Inc., a Chicago-based real estate firm, and makes close to $1 billion a year in acquisitions, said Jim Gunn, who brokered the malls' purchase.
"They're very big and very smart people," said Gunn, principal broker for Honolulu-based Gunn & Gunn Inc.
"Doing these kind of deals is not easy," Gunn said. "The size of it. The money that is involved. All of the stores you've got to deal with."
Garvey said LaSalle would eventually sell the center after making improvements, but not anytime soon. "We're just typically not short-term holders," he said.
Real estate firms as big as LaSalle buy strategically, where prices are bound to grow, said Stephany Sofos, a local retail analyst and real estate consultant.
"They're very sophisticated investors, these guys," she said.
The Pearl Highlands Center had struggled in the mid-1990s because of the state's economy, but began doing better when Signature opened its theater in May 1997, Sofos said.
The Pearl Highlands location has other major benefits, Garvey said. For one, Home Depot Inc. plans to move in nearby next summer. The Atlanta-based home improvement chain broke ground on a 130,000-square-foot outlet across from the center in August.
And the city is building a four-lane, 3,800-foot road above Pearl Highlands, the start of an industrial-commercial development on the old, 109-acre Navy Manana storage site. The road will connect the intersection of Moanalua and Waimano Home roads with Acacia Road, and feed freeway traffic into the shopping mall.
Garvey noted LaSalle is constantly looking for other properties to buy in Hawaii, but has no other plans for purchases right now.
Sale price: $62.36 million
Deal at a glance
Buyer: LaSalle Investment Management Inc., based in Chicago
Size: 420,000 square feet
Location: 1000 Kamehameha Highway, Pearl City
Number of tenants: 26
Major tenants: Sam's Club, Signature Theatres, Old Navy Clothing Co.