Damon Estate
land sale may spur
new developmentBut many long-term leases are in
effect on the 220 acres of Oahu land
If the Damon Estate can find a buyer for its 220-plus acres of commercial and industrial land on Oahu it could bring new development to some of the oldest parts of the city, real estate executives said.
The Estate of Samuel Mills Damon is seeking a single buyer for a portfolio of its commercial land on Oahu, most of it mauka of Honolulu Airport. Damon retained a California real estate firm, Eastdil Realty, which is now introducing the package to potential buyers. The land has been estimated as worth more than $400 million.
"It's old buildings that have been neglected for a period of time," said Matthew Bittick, general manager of Honolulu real estate firm Grubb & Ellis/CBI Inc. "That's basically the nature of leasehold."
Most of the land is in the Mapunapuna and Moanalua. The estate owns the fee but the lessees, many of which have around 20 years left on the leases, own their buildings.
That would still be the case under a new land owner while the leases are in force, but a new owner could also bring more flexibility and new plans.
"I think it's going to be an interesting turn of events for industrial properties on Oahu if they do sell it and if the new owner decides to do something with it," Bittick said.
Jamie Brown, head of another real estate firm, Hawaii Commercial Real Estate, said that the Damon Estate, as the leased-fee owner, has been flexible in agreeing to new and longer lease terms so the lessees can improve their buildings.
"But for someone with a really big picture and a long-term view, I think it's a huge long-term opportunity," Brown said. "It's really exciting that this big of an opportunity is out there in the market," he said.
The offering is very complex, however, he said.
Much of it is in a leased-fee status, where the estate "owns the dirt" and the tenants own the improvements. There are some properties where Damon owns the buildings and the land, he said.
Aside from airport, Mapunapuna and Moanalua properties, the portfolio includes some parcels on either side of Sand Island Access Road as well as the land under the Pali Safeway and the Salt Lake Shopping Center.
It is being offered as one package and the estate has said it won't accept offers for individual pieces, according to real estate sources who have seen the sales documents.
Timothy Johns, Damon Estate chief operating officer, could not be reached for comment yesterday. Johns has said in the past that selling the land is one of several possibilities as it prepares for the eventual wind-up of the estate.
The estate is due to be divided among some 20 beneficiaries upon the death of Samuel Damon's two remaining grandchildren, who are in their 80s.
In separate news, the estate yesterday concluded the sale of 115,000 acres of its Big Island land for $22 million to the National Park Service and the Nature Conservancy for expansion of the Volcanoes National Park.
Suzanne Case, executive director of the Nature Conservancy, said the purchase of the Damon Estate's Kahuku Ranch land was concluded yesterday.
The National Park Service paid $16 million, which was appropriated by Congress for the purpose, and the Nature Conservancy provided bridge financing of $6 million and is a joint owner of the property, Case said.