Marketplace at Kapolei up for sale at $26M
The center cost $10 million to develop only four years ago
The Marketplace at Kapolei is on the market for close to $26 million.
About the center
Name: Marketplace at Kapolei
Address: 590 Farrington Highway
List price: $25.9 million leasehold
Listing agent: Reza Investment Group Inc.
Year built: 2002
Size: 64,111 square feet
|
The owner, California-based
Kapolei Marketplace LLC, shelled out $19.2 million for the center's leasehold interest early last year. That was more than double the $10 million it cost to develop the 64,000-square-foot center in 2002.
Reza Investment Group of Irvine, Calif., is marketing the leasehold property to potential investors on the mainland. The average price per square foot comes out to slightly more than $400.
The marketplace is home to about 30 tenants, including family-owned businesses such as En Fuego Grill & Poke, along with Ho Ho Chinese Cuisine, Supercuts, H&R Block, the UPS Store and Quizno's.
Originally, the center was intended to be the second phase of the Kapolei Shopping Center, which is anchored by Safeway and Longs.
The marketplace's developer was a partnership of the Gresham Co. of Maui, Pacific Acquisitions Ltd. of Honolulu and Phoenix-based Hugo-Pacific Development Co.
Brokers have mixed reviews of the shopping center, which has occupancy of 98 percent.
"Because it's a leasehold center, they won't be standing in line to buy it," said Joe Leonardo of Leonardo & Associates. "If it were fee simple, there would be a line from Kapolei to Honolulu to buy it. Investors will still have an appetite for it, but they'll sharpen their pencils."
At more than $400 per square foot, the asking price would set a new threshold for the Kapolei area.
Mike Hamasu, research director of Colliers Monroe Friedlander, said that with Oahu's retail vacancy at 3 percent, Hawaii's retail centers continue to look attractive to mainland investors. Colliers handles the leasing for the Marketplace at Kapolei.
Average rents in the Marketplace at Kapolei are at $2.58 per square foot per month.
Base asking rental rates in West Oahu range between $3.13 to $4.06 per square foot per month, according to Hamasu.
The listing comes at a time when Kapolei, dubbed Oahu's "second city," is experiencing unprecedented growth.
Plans for Kapolei Commons, an open-air mall measuring more than 200,000 square foot by the MacNaughton Group, are moving forward.
The Department of Hawaiian Home Lands also says it is in negotiations with a developer for a mall on a 67-acre site in East Kapolei the same size as Ala Moana Center.
Reza is a retail investment advisory firm focusing exclusively on shopping centers and retail investment properties.
