CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM The 1132 Bishop Street building in downtown Honolulu has been sold to the same group that bought the nearby Harbor Court.

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Partners buy
1132 Bishop St.
office building

Local developer Dick Gushman
and real estate firm Douglas
Emmett buy the downtown
office building

One of the largest property owners in the Los Angeles area has purchased the 1132 Bishop Street office tower in downtown Honolulu, according to its local partner, real estate developer Dick Gushman.

Gushman said the property, located near the Fort Street Mall with nearly 450,000 square feet of office and retail space, has been purchased by DEG LLC, a partnership between Gushman's DGM Group and Santa Monica-based real estate investment and management firm Douglas Emmett.

The building is the second property in DEG's local portfolio. It purchased the leasehold interest in the Harbor Court commercial tower for $27 million in August.

Gushman, the co-developer of the Waikele shopping complex and a trustee of the Campbell Estate, would not reveal a purchase price for 1132 Bishop Street but said it and the Harbor Court Tower were attractive assets in an attractive market.

"We were encouraged by what we've been able to buy," he said.

Douglas Emmett officials were unavailable for comment.

The property is being sold by California-based VEF Advisors LLC, which bought the building in 1998 for $73.1 million.

Douglas Emmett is the latest in a parade of mainland commercial property investors flocking to Hawaii's market in the hopes that office rents are in for a sustained upswing.

It has a Southern California portfolio valued at more than $3 billion, according to the company. That includes 13 million square feet of office space and around 2,000 residential apartment units.

"It's significant that they have extended themselves to acquire another Class A asset here," said Scott Kuklish, senior vice president of PM Realty Group.

"I think it's further recognition that there is upside in the market over the long haul."

Gushman said the joint venture buyers have no changes planned for the property. He said they plan to retain current leasing agent Hawaii Commercial Real Estate LLC and property manager Colliers Monroe Friedlander Inc.

He declined to offer further details.

The building's tenants include U.S. Bankruptcy Court, Actus Lend Lease, McDonald's Corp. and Territorial Savings Bank.

The 25-story tower was built in 1992 by California developer Irwin Daniels.

It is the latest of several Class A, or high-quality, office buildings to change hands in the past few years. The Davies Pacific Center, the Waterfront Plaza, Harbor Court, the Topa Financial Center and Pioneer Plaza have all gained new owners.