Dealmaker: Alexander & Baldwin Acquires Hawaii Industrial Assets for $68M

May 3, 2019

Alexander & Baldwin, Honolulu, acquired two Hawaii industrial assets for $67.5 million.

The firm is reinvesting proceeds from selling 41,000 acres of agricultural farmland on Maui. A&B previously reinvested $66.5 million in three Class A warehouse buildings in Kapolei and $42 million in a ground lease under the Home Depot store in Iwilei, Oahu.

In a $41 million off-market acquisition, A&B acquired the ground lease interest in Kapolei Business Park West Lot 31, commonly known as the Honolulu Authority of Rapid Transportation precast yard. The 36.4-acre parcel is licensed to the City and County of Honolulu through 2025 for use as a fabrication facility and storage yard for precast concrete components for the HART rail project.

Kapolei, often called Oahu’s “second city,” is 16 miles from the Daniel Inouye International Airport and 20 miles from the Port of Honolulu. The city is served by its own deep-water port and is home to most of the new industrial product added to the market in the past decade.

A&B chief real estate officer Lance Parker called the property an opportunity to acquire Oahu industrial-zoned land at scale with both current in-place income as well as significant future development potential. “This parcel has all offsite infrastructure in place and provides us with numerous options given the location and the demand for industrial uses in the Kapolei submarket,” he said.

A&B also acquired Kapolei Enterprise Center, a newly constructed Class A warehouse building in Kapolei, for $26.5 million in another off-market transaction. Colliers International Hawaii represented seller Avalon Group, Honolulu.

The 93,000-square-foot building delivered in March and was 100 percent pre-leased before completion with 51 percent of space leased to Best Buy and the remainder leased to Hawaii Transfer Co.

“Industrial assets have extremely low vacancy rates and are one of our preferred asset classes, along with grocery-anchored retail and ground leases,” Parker said.