Waipio center goes
for $30M even though
it wasn’t for sale

A Chicago real estate investment management company has bought the 133,537-square-foot Gentry Waipio Shopping Center for $30 million, even though the property initially was not for sale.

LaSalle Investment Management Inc., which manages close to $23 billion in real estate assets worldwide, including the Maui Marketplace, worked with local broker Joseph Leonardo to acquire the center.

The seller, Gentry Cos., wasn't looking to sell, but agreed to sell the center for the right price, Leonardo said.

"The seller got a really good price and the buyer acquired a really strong product," he said. "A stable, grocery-anchored community center is considered a cash cow in this market."

The shopping center, which Gentry built about 20 years ago to cater to Mililani, Waipio and Waipahu residents, is anchored by Foodland Super Market and Outback Steak House. It boasts a video store, gas station and numerous fast-food and retail stores.

The sale is just one example of the aggressive commercial real estate deals that are taking place throughout the state as investor demand has reduced the number of properties for sale, Leonardo said.

"Large institutional investors have a strong appetite for Hawaii, but there's not a lot of good product available, especially fee-simple and in Oahu," he said.

A lack of investment opportunities in the mainland and a resurgence in the state's economy have fueled interest in Hawaii's commercial real estate, said Mike Hamasu, director of consulting research for Colliers Monroe Friedlander.

Increased demand for strong commercial real estate nationwide has resulted in property shortages, price wars and more aggressive purchasing strategies, Hamasu said.

"The market for good, solid, income-producing real estate is so attractive to investors that agents and brokers have started targeting properties that aren't currently on the market," he said.

"We are giving off returns that are still fairly healthy in comparison to other markets and we have a vibrant economy."

LaSalle also has profited recently from Oahu's frenetic market.

At the start of the year, LaSalle sold Pearl Highlands Center, a neighborhood shopping area, to an investment fund managed by New York-based Morgan Stanley for about $113.5 million.

The purchase price was 82 percent higher than what LaSalle paid to acquire the 410,325-square-foot property in 2000.