Alexander & Baldwin has acquired three Hawaiian retail centers for $254 million. The seller was Terramar Retail Centers.
The assets include the Laulani Village Shopping Center, Hokulei Village Shopping Center and Pu`unene Shopping Center.
“The acquisition of these three centers enables us to complete the strategic migration of our commercial real estate portfolio from the U.S. mainland back to Hawaii,” said Chris Benjamin, A&B president and CEO. “This reinvestment in our local communities has been aided by our conversion to a real estate investment trust last year, and we are pleased to bring these important centers under local ownership.”
Laulani Village, located in Ewa Beach, Oahu, is a new, 175,000-square-foot community retail center. Laulani Village is 95 percent leased and anchored by Safeway, Ross Stores, Petco and City Mill, and also features other tenants such as Buffalo Wild Wings, Teddy’s Bigger Burgers, Starbucks and Panda Express. The asset provides A&B with a strategic presence in West Oahu, one of Hawaii’s highest growth markets. Despite the closure of more than 250,000 square feet of big-box retailers such as Kmart and Sports Authority during the past year, Oahu’s resilient retail market was still able to generate positive absorption, according to Colliers International. At year-end 2017, the retail market posted a solid gain of 453,754 square feet of occupancy growth. As a result, vacancy rates fell from 8.44 percent recorded at year-end 2016, to its current rate of 5.85 percent.
Hokulei Village, a new neighborhood retail center, is located in Lihue, Kauai. A&B’s first grocery-anchored retail center on the island, Hokulei Village is a 103,000-square-foot center that is 97 percent leased to tenants including Safeway, Petco, American Savings Bank, Chevron, Jack in the Box, Dominos and Panda Express.
Pu`unene Shopping Center, completed in 2017, is a 113,000-square-foot retail center in Kahului, Maui, collocated with the island’s only Target store. Existing and signed tenants include Ulta Beauty, Starbucks, Petco, Maui Tacos, Massage Envy, Planet Fitness and Verizon.
Overall, Hawaii’s retail market vacancy rate increased to 6.1 percent during the fourth quarter 2017, just 10 basis points short of the highest vacancy rate since third quarter 2014, according to CBRE. The statewide net absorption of negative 294,068 square feet resulted in a 4.1 percent decrease in asking net lease rates to $5.43 per square foot and a 4.2 percent increase in operating expenses to $1.73 per square foot.
