Market Reports

Category Archives: Hawaii Industrial Properties

FOR SALE: Truly Rare Fee Simple Net Leased Investment in Honolulu

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We are excited to announce the SALE of a TRULY UNIQUE Fee Simple Industrial Zoned property in the Mapunapuna area, blocks away from the Honolulu International Airport! The property is 100% leased to credit tenants! 

Investment Summary

Asking Price: Submit Offer

2012 NOI: $804,000

2024 Projected NOI: $955,909

Replacement Cost Estimate: $16,600,000

Tenure: Fee Simple

Occupancy: 100%

Land Area: 115,747 SF

Total Building Area: 48,270 SF

Building A: (Polynesian Adventure Tours) 27,600 SF

Building B: (Infiniti) 7,410 SF

Building C: (Polynesian Adventure Tours) 13,260 SF

Address: 2880 Kilihau Street, Honolulu, HI

Zoning: I-2 Intensive Industrial District

Investment Highlights

• 100% leased to credit tenants

• Long term guaranteed leases in place

• High traffic counts and commercial density

• Within close proximity of over 89,000 households within a 5-mile radius

Tenant Lease Summary

Polynesian Adventure Tours
Owned and Guaranteed by Norwegian Cruise Lines
Norwegian Cruise Lines has an S&P rating of B+

Lease Expiration: July 31, 2025
Building SF: 40,860 (Buildings A & C)

King Infiniti of Honolulu

Lease Expiration: July 31, 2025
Building SF: 7,410 (Building B)

To download the Brochure and Confidentiality Agreement, please click here.

For more information on the property, please go to www.NNNHonolulu.com
 

98 Commercial Properties For Sale in Hawaii But Why Aren’t They Moving?

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Recently, many of my buyers complained that most of the offerings in the Hawaii market are "junk." What is even more unsettling is that 23 of these properties have been on the market for 9 months or more and stale at this point.

Investors ARE looking to invest in Hawaii but they are seeking quality properties. There are a few on the market and I will share with you my 2 cents in the next posts.

Here is the breakdown of properties for sale on the islands:

67 properties for sale at $2 – $5 million

28 properties for sale at $5 – $20 million

3 properties for sale over $20 million

Of the 98 properties, 3 made it to my Top 3 Picks. Stay tuned to find out how these 3 picks may mean REAL income and REAL opportunities for you to make REAL money!

Distressed Property in Hawaii sells just before confimration sale

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A large parcel of industrial property sold in the first quarter of 2010 despite the uncertainty around the ownership of the property.  The land area is approximately 59 acres, and the property sold for $12.5MM.  The property had been in foreclosure and reportedly, the note had been sold at a small discount off the face value.  An investor came in just prior to the confirmation hearing and paid the price to pay off the mortgage.  The property is unimproved, and was recently rezoned for industrial use.  Most likely, plans include one to ten acre industrial lots with common areas and streets being put in by the new developer.

There was a lot of interest in this property, and we can see why, with a price tag of $4.86 per square foot for the raw, unimproved industrial land, there seems to be a profit for someone.  At this price, it should allow for a developer to hold the property for a couple of years, make improvements, and sell the individual lots at a retail price as the market strengthens.

Hawaii Commercial Real Estate Loans are Being Re-negotiated and Extended

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While visiting clients in New York City, we noticed the beginning of a trend.  Several of the large borrowers have been able to extend the due date deadlines for their Hawaii commercial real estate loans.  We noted that the terms for these loans were exceptional, with very low interest rates. The lenders, rather than foreclose or take the Hawaii property back at this point, have agreed to extend the low interest rates in hopes that the situation gets better.  Taking back a property in today’s environment is an expensive and time-consuming business.  This allows these owners to continue being able to keep their mortgages current and retain the low interest rates that were achieved three and four years ago.  In most cases, the properties are still throwing off positive cash flow to the borrowers.

Hawaii Commercial Real Estate Loans

We noted that these borrowers, being in New York City, and being actively involved in the financial markets, seemed to have better access to the different tranches or levels of lenders within each of the loans.

Many Hawaii borrowers have tried to communicate and work with the different tranches of lenders without much success.  The larger borrowers in the money city centers seem to be having better results at negotiating first the riskiest pieces of the loans, and then second the main body or first position of the loan to achieve these extensions.

Fourth Quarter 2009 – Top 3 Commercial Properties in Hawaii

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My top 3 picks for Commercial property in Hawaii:

The video includes more detail and a clip of the third property listed below.

1. Boutique Hotel on a large piece of Fee Simple land in a triple A location. There’s an opportunity to re-brand the  hotel and the owner is looking to restructure capital stack, both equity and debt.

2. Small neighborhood shopping center on Kauai. Located near the harbor, the property is just over 90% occupied, with reasonable rents. What caught our eye was the Owner’s contract to buy the fee simple interest under the property, making it a great long term investment.

3. Warehouse in Campbell industrial park, currently occupied by Oceanic companies.  Located on just over 17,000 SF of land, this 9,200 SF property includes parking, a yard area, and interior space for both warehouse and office. Currently, the property offers a 9.5% return on income from the existing tenant for 2000.

Macadamia orchard sold on the Big Island

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A 736-acre macadamia nut orchard in Keaau on the Big Island has been sold to Geyser Keaau Hawaii LLC, a unit of California-based Geyser Holdings, for undisclosed terms.

Geyser is not getting into farming per se, said Mark Bratton, a vice president at Colliers International.

“With an in-place farming and nut purchase contract, this is a great asset requiring minimal site management by the new owner,” he said in a statement.

Mauna Loa Macadamia Nut Co., a subsidiary of the Hershey Co., will buy the orchard’s output.

It is a “net lease deal” in which the property is leased by an operator and Geyser will be collecting rent, which “goes up a bit” every two years, Bratton said.

The orchard was sold by Keaau Macadamia Land LP and Roland and Eleanor Herberg of San Diego for estate planning reasons, Bratton said.

The purchase expands Geyser’s portfolio of commercial real estate, primarily in resort retail and hospitality, to more than $400 million.

Its Hawaii holdings include Poipu Shopping Village on Kauai and an interest in King Kamehameha’s Kona Beach Hotel on the Big Island.

Freezer Food Distribution Facility Commands $19M

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KAPOLEI, HI-Locally based KDI Investments Inc. has acquired a 189,000-square-foot cold storage freezer food distribution building from Tower Plaza Associates LP for $19.2 million, according to Colliers International brokers who negotiated the sale. The property, at 91-315 Hanua St. in Kapolei on the island of Oahu, is the largest such facility in Hawaii, according to the Colliers brokers, who included senior vice president Fred Cordova in the Downtown L.A. office of Colliers along with senior vice president Mark Bratton and executive vice president Scott Mitchell at Colliers International in Hawaii.

The Colliers team represented the seller, which had acquired the property in 2006 from a related company of Foodland Super Market Ltd., Hawaii’s largest locally owned and operated grocery retailer. The property, which is located in Campbell Industrial Park, is occupied by a subsidiary of C&S Wholesale Grocers, the second-largest grocery wholesaler in the US.

The Colliers team notes that the decision to sell was based on the seller’s desire to free capital from some of its stabilized income properties. This move positions Tower Plaza Associates to take advantage of other investment opportunities, including those arising from the distressed assets. The buyer, a local family that did not have broker representation, acquired the high-yielding industrial complex to balance its portfolio of investments.

Cordova describes the 91-315 Hanua St. building as unique in terms of its size, location and use. “These features, combined with a solid tenant who has occupied the property for more than 22 years and has a significant amount of capital vested in it, provided a strong, long-term yield profile that is consistent with the buyer’s investment strategy,” Cordova remarked.

Bratton added that the buyer acquired the property at an “opportune time because of the high rates of return with an in-place credit tenant.” Considering the eventual upswing in the market cycle, “Investors will not see this type of return three to five years from now,” he said.

Today there are 326 properties available for sale in the State of Hawaii

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I checked in on the market today, and found there are 55 shopping centers and retail properties for sale, 42 office buildings, 49 industrial properties, and 7 hotels available for sale over $1 million in the State of Hawaii.

Inventory has been climbing this entire year with a lack of sales and some financial pressure on owners.

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