Maui Airport Expansion in the Works
Hawaii real estate investment trust Alexander & Baldwin has an agreement to sell more than 300 acres of agriculture land on Maui to the state of Hawaii for an expansion of the Kahului Airport and is in escrow to sell a shopping center in Lahaina to an unnamed buyer for $11 million.
The sale of the 313 acres of former agricultural land to the state for $8.6 million is expected to close during the third quarter, Honolulu-based Alexander & Baldwin (NYSE: ALEX) executives said during a second-quarter earnings call with analysts on Thursday. The Hawaii Board of Land and Natural Resources gave final approval to the deal at its July 13 meeting, noting that the land will be used for a new runway at the Kahului Airport as outlined in the airport’s master plan.[caption id="attachment_146" align="aligncenter" width="852"] PC: Hawaii Travel Guide[/caption]
A&B also expects to close in the third quarter on the sale of the Lahaina Square Shopping Center, which it had bought for $4.85 million in 2010, and three small adjacent parcels for $11.3 million. A&B is planning to sell the property — whose tenants include Ace Hardware, Maui Tacos and a number of local retailers, restaurants and medical tenants — using a 1031 exchange and plans to acquire another asset as part of the exchange.
“The Lahaina Square story represents an opportunity to upgrade our portfolio,” A&B President and CEO Chris Benjamin said. “It demonstrates that we’re continually evaluating the optimal ways to create value from individual assets.”
A&B purchased five retail units in The Collection from its development joint venture for $6.9 million, but Benjamin noted that “most of the purchase price will come back to us as we have about a 98 percent economic interest in The Collection joint venture interest.”
A&B reported net income of $2.5 million, or 3 cents per diluted share, for the second quarter, compared to net income of $4.3 million, or 9 cents per diluted share, for the same quarter in 2017.
A&B reported net income of $49.8 million for the first half of the year, or 69 cents per diluted share, compared to $10.6 million, or 23 cents per diluted share, for the same period last year.
In its commercial real estate segment, A&B reported that it has signed Guitar Center to a 19,700-square-foot space at Pearl Highlands Center for the music retailer’s first Hawaii store. Ulta Beauty will open its second Hawaii store at the center on Aug. 10. The first Ulta store opened last month at A&B’s Puunene Shopping Center, where sales were double the retailer’s expectations, Benjamin said. A third store is getting ready to open soon in the former Pier 1 Imports space in Kailua.
On Oahu, A&B’s $21 million Lau Hala Shops redevelopment of the former Macy’s building in Kailua is 88 percent pre-leased, Benjamin said, with ground-floor inline spaces still available. UFC Gym this week opened an enrollment center in one of the inline spaces facing Kailua Road in anticipation of the second-floor gym's opening later this fall.
A&B is in the planning stages for redevelopment of another property in Kailua, the Safeway-anchored Aikahi Park Shopping Center, where A&B has held occupancy down intentionally in anticipation of the work, Benjamin said.
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