By: Duane Shimogawa, Reporter- Pacific Business News
A&B Properties, Inc. has agreed to purchase the Pearl Highlands Center, a 415,000-square-foot, fee-simple retail center in Pearl City for $141.5 million, the company announced on Thursday.
The real estate subsidiary of Honolulu-based Alexander & Baldwin Inc. (NYSE: ALEX) expects to close on the transaction later this year. A&B said that the purchase price includes the assumption of a $59.3 million mortgage, which matures in September 2016. The closing of the purchase depends on various conditions such as the lender’s approval of the loan assumption.
The center, which sits on 13.5 acres, is 98 percent leased and anchored by Sam’s Club, Regal Theaters, Ross Dress for Less, 24 Hour Fitness, and a soon-to-be-opened Buffalo Wild Wings.
“The Pearl Highlands acquisition will represent a significant advancement of our strategy to migrate our commercial portfolio back to Hawaii,” A&B President and Chief Operating Officer Chris Benjamin said in a statement. “The addition of Pearl Highlands will boost our total Hawaii commercial square footage over the 2 million square-foot mark — a 25 percent increase — and will make A&B the second largest retail owner/operator in the state.”
A&B expects to fund $82.2 million of the total purchase price with a combination of 1031 and reverse 1031 exchange sale proceeds from transactions involving both Mainland commercial assets and non-income producing land in Hawaii, Benjamin said.
Morgan Stanley bought the Pearl Highlands Center in 2004 for $113.5 million and sold itless than two years later for $130 million to a Boston real estate investment company called AEW Capital Management, the current owners.