A&B Properties closed on the sale of the Pacific Guardian Tower for $38 million yesterday to Maruito USA Inc., a U.S. subsidiary of Japan-based Maruito Group.

“;The sale of Pacific Guardian Tower is another clear signal of the continued demand for quality, stable income properties in Hawaii,”; said Norbert Buelsing, president of A&B Properties, the real estate subsidiary of Alexander & Baldwin Inc.

“;Further, the favorable pricing we realized is a reflection of our efforts over the past several years to transform PGT into one of urban Honolulu's premier office buildings.”;

Pacific Guardian Tower, measuring 130,600 square feet, is an 18-story class 'A' office building at the corner of Kapiolani Boulevard and Keeaumoku Street, across from Ala Moana Center.

Tenants include Pacific Guardian Life Insurance, HMA Inc. dba Health Management Associates, ESL International and ACS State Healthcare.

A&B bought the tower in 2001 from Tosei Shoji Co., which developed the building as Commerce Tower, for $22.7 million, according to county tax records.

Under A&B's ownership, Buelsing said, the average net rent at Pacific Guardian Tower increased 34 percent, while occupancy grew to 95 percent from 74 percent.

Buelsing said A&B Properties expects to redeploy proceeds from the sale into other commercial real estate investments with strong growth potential on a tax-deferred basis.

Steve Sombrero, president and owner of NAI ChaneyBrooks and broker for Maruito USA's acquisition of Pacific Guarding Tower, called the property a sound investment.

“;With the increasing strength of the Japanese yen, we believe this is an opportune time to make real estate investments in Hawaii,”; said Sombrero.

With the sale, A&B Properties' commercial investment portfolio now includes 8.4 million square feet of retail, office and industrial space in Hawaii and eight mainland states.