Pearl Highlands hits the market -- again

Morgan Stanley put the property on the market about 18 months after one of its funds acquired it

New York-based Morgan Stanley has put the Pearl Highlands Center on the market, just about 18 months after one of its funds acquired it.

Eastdil Secured is marketing the 400,000-square-foot shopping center without a listing price. In December 2004, Morgan Stanley Real Estate's Prime Property Fund acquired the center for $113.5 million.

The center, built in 1993, has had a consistently high occupancy rate.

CENTER UP FOR SALE Sale price: No list price Owner: Morgan Stanley Real Estate's Prime Property Fund Size: 410,325 square feet Location: 1000 Kamehameha Highway, Pearl City Anchor tenants: CompUSA, Sam's Club, Regal Cinemas, Ross, Pier 1 Imports Opened: 1993

At the time Morgan Stanley acquired it, the center was 98.7 percent occupied, with most leases extending to 2013 and beyond. Over the last year and half, new tenants have signed on. Today the center, which is managed and leased by Colliers Monroe Friedlander, continues to have close to 100 percent occupancy.

In July, CompUSA moved from Waikele to a larger, 20,000 square-foot space at Pearl Highlands to expand its offerings.

Pier 1 Imports also opened a store at Pearl Highlands last year, replacing Old Navy, while Puma is expected to open in the near future.

"It's a successful shopping center," said Joe Haas, senior managing director of CB Richard Ellis Hawaii. "It's in the demographic center of Oahu and CompUSA is very credible."

Given the strength of the retail market, now is a good time to put a shopping center on the market, according to Haas.

"There's a tremendous appetite for investment properties in Hawaii," he said. "You can expect to get a higher price today than you would have previously gotten."

CompUSA's recent move to Pearl Highlands, as well as developments near the new Wal-Mart at Manana, are expected to boost the center's visibility.

Other longtime tenants include Price Busters, Pictures Plus, Ross and Regal Cinemas.

Only two spaces are for lease -- a small 1,100-square-foot space in the food court and a 12,600-square-foot space next door to CompUSA.

Asking base rents range from $2.25 to $3 per square foot per month.

Retail vacancy on Oahu has plummeted to 3 percent, according to a midyear retail report by Colliers Monroe Friedlander, pushing rents higher.

Morgan Stanley's 2004 acquisition, at $113.5 million, was a considerable markup more than the $62 million that Chicago-based LaSalle Investment Management Inc. shelled out for Pearl Highlands in 2000.

Commercial brokers speculate that the center could fetch up to $130 million or more in this round.

"This was probably a time, from a disposition point, that works well," said James Piane, chief executive of Colliers Monroe Friedlander. "They (Morgan Stanley) continually look at their real estate assets and determine the best time to sell. ... Obviously, they came to the conclusion that this was the best time for their portfolio objectives."

Pearl Highlands was Morgan Stanley Prime Property's first Hawaii investment.