Alexander & Baldwin Inc. has purchased the leasehold Kaneohe Bay Shopping Center on the Windward side of Oahu for $13.3 million, bringing the company's recent real estate purchases in Hawaii to $170 million. A&B purchases
Kaneohe Bay Center
for $13.3 millionThe company also
is buying a shopping
complex near PhoenixBy Tim Ruel
Star-BulletinA&B declined to reveal what it paid for the shopping center but a source familiar with the deal confirmed the price for the Star-Bulletin. The sale was to be recorded today.
The shopping center, across Kamehameha Highway from Windward Mall in Kaneohe, is on 9.8 acres primarily owned by Kamehameha Schools. The 125,000-square-foot center is 98 percent leased, including anchor tenants Safeway and Longs Drug Store.
In the same announcement, A&B said it is also buying the 85,000-square-foot Carefree Shopping Center, located north of Phoenix in Carefree, Ariz. That's the second shopping center in Arizona for A&B, which bought the 133,600-square-foot Mesa South Center in a Phoenix suburb for $9.4 million in 1999. A&B also bought the Southbank II office building in Phoenix in 1998.
Property managers Gabrielsen & Co. developed the Kaneohe Bay Shopping Center in 1971 for the previous owner, Boston-based Fifty Associates. Gabrielsen has managed the center ever since, and also served as Fifty Associates' commercial real estate representative in the deal with A&B.
A&B is not keeping Gabrielsen as the property manager, however. Local real estate firm Colliers Monroe Friedlander won the bid to manage the Kaneohe Bay center.
Gabrielsen, which has developed several shopping centers for Fifty Associates, will continue to manage the Waipahu Town Center on Farrington Highway.
Honolulu-based A&B has invested in nine other Hawaii properties in the past three years, including the 18-story Pacific Guardian Tower on Kapiolani Boulevard.
"We're positive long-term," said Norbert Buelsing, executive vice president of A&B Properties.
A&B also has some money to burn.
In May, the diversified holding company sold off its shares in the parent company of Bank of Hawaii, taking $9.4 million in after-tax profits. A&B also stands to gain another $68 million in the pending buyout of the parent of First Hawaiian Bank. A&B cheaply acquired shares in both banks over the years as part of its loan relationships.
A&B has said the windfall from the stock sales would help finance its $36 million annual dividend, its $100 million capital program, more real estate acquisitions and possibly a stock buyback.
A&B said it generally invests in properties that are likely to show appreciation and above-average tenant income. Kaneohe Bay Shopping Center fits the criteria, Buelsing said.
"It's a good neighborhood," he said. Home ownership is high. Some 2,300 Navy personnel have relocated to Marine Corps Base Hawaii at Kaneohe Bay from the former Barbers Point Naval Air Station. Safeway and Longs have expanded and renovated in the past couple years, along with the rest of the shopping center.
Across the street at Windward Mall, Signature Theatres has opened the long-awaited Windward Stadium 10 movie theaters in the space vacated by J.C. Penney. Mall tenants had been looking forward to the new theaters to boost retail activity.