HONOLULU (HawaiiNewsNow) - Alexander & Baldwin has announced that it has agreed to acquire a portfolio of commercial properties from Kaneohe Ranch and the Harold K. L. Castle Foundation for $373 million.
The transaction is anticipated to close in late December.
The portfolio, which encompasses grocery- and drug store-anchored shopping centers, retail strip centers, light industrial properties and ground leases, is primarily located in Kailua.
The portfolio also includes about 585 acres of mostly preservation-zoned land in Kailua. A&B will fund the purchase with proceeds from the planned sale of several commercial properties it owns on the Mainland, along with other tax-deferred 1031 proceeds.
"With this purchase, we will be acquiring one of the state's largest and finest retail portfolios, in an excellent market," said Stanley M. Kuriyama, A&B chairman and chief executive officer.
"The portfolio includes 386,000 square feet of prime retail and light industrial space in the heart of Kailua, and over 50 acres improved with retail and other commercial centers that are ground leased to third-parties in Kailua and other parts of Windward Oahu and urban Honolulu," said Christopher J. Benjamin, A&B president and chief operating officer.
"I don't believe we could have found a better buyer than Alexander & Baldwin," said Mitch D'Olier, Kaneohe Ranch president and CEO, and president of the Harold K.L. Castle Foundation. "A&B is such a respected kama'aina business institution with a similar history to that of the Castle family."
As a result of the sale, Kaneohe Ranch will undergo restructuring, D'Olier said. Kaneohe Ranch offices will remain at Castle Junction at the entrance to Kailua.
D'Olier said A&B is likely to continue the thoughtful management of Kailua that Kaneohe Ranch has pursued for many years.
"Kailua is a unique place, a seaside community that even the president of the United States thinks is special," he said.
Kaneohe Ranch oversaw redevelopment of the Kailua Town Center. As Kailua's 50- and 60-year leases expired over the past 10 years, it made Kailua Town a pedestrian-friendly retail-and-dining gathering place. Aside from successful iconic stores like Whole Foods Market next to one-of-a-kind local shops and restaurants, the town center has become a showcase for Hawaiian culture, with "Kanikapila in Kailua" hosting some of the state's best known Hawaiian musicians and the "I Love Hula" series providing a showcase of top Island hula hālau.
In announcing the property sale to A&B, D'Olier thanked the many commercial tenants and members of the Kailua community who have worked with Kaneohe Ranch and the Harold K.L. Castle Foundation over the years to make Kailua a vibrant town with a real Hawaiian sense of place.