Honolulu Office Building Taken by Pacific Office Properties
- May 27, 2008
Adding to its Honolulu office presence and increasing its status as Hawaii’s largest office building owner, Pacific Office Properties Trust Inc., the West Coast office building REIT, acquired the Kalakaua Business Center in Waikiki district for an undisclosed amount. The Class A office building is located at the entrance to one of the world’s leading visitor destinations. The Kalakaua Business Center has approximately 152,000 leasable square feet on nine floors and includes 29,000 square feet of ground floor retail space. Its location on the corner of Kalakaua Avenue and Beach Walk is immediately adjacent to the new Waikiki Beach Walk development and the developing Trump International Hotel and Tower Waikiki Beach. A Pacific Office Properties Trust executive said, the impending opening of the Trump complex makes this an ideal business location in Waikiki. Currently 97 percent occupied, the property includes the only Planet Hollywood restaurant in Hawaii as well as the international operations of Bank of Hawaii. Pacific Office Properties owns six other buildings in the Honolulu area including Davies Pacific Center, Pan Am Building, Waterfront Plaza, Clifford Center, PBN Building and First Insurance Center. The Hawaii economy is strong with an April unemployment rate of 3.3 percent, almost two percentage points lower than the national unemployment rate, according to the Hawaii State Department of Labor and Industrial Relations. “Hawaii’s resilient economy has continued to persevere, maintaining high employment levels while helping to maintain relatively low unemployment,” said Darwin Ching, director of labor and industrial relations for Hawaii’s State Department of Labor and Industrial Relations. “We remain optimistic that Hawaii’s job market will withstand the recent closures of several high-profile companies.” Pacific Office will co-own Kalakaua Business Center in partnership with an institutional co-investor as part of its co-investment strategy. On May 2, Pacific Office Properties Trust completed the acquisition of interests in four office buildings located in San Diego and Phoenix. The four buildings are among the 18 office buildings that Pacific Office has an option to acquire under the terms and conditions of its recently completed formation transactions. The remaining 14 properties comprise an additional 1.6 million leasable square feet. Pacific Office has already exercised its option to acquire three of the 14 buildings and these acquisitions are expected to close next month. Each of the transactions is subject to customary closing conditions. The remaining 11 properties are subject to Pacific Office’s discretion to exercise its option. Pacific Office was formed via the contribution of The Shidler Group’s western U.S. office building portfolio and operations to a subsidiary of Arizona Land Income Corporation. As part of its formation transactions, Pacific Office was granted the option to acquire certain properties that The Shidler Group may have acquired prior to the consummation of the formation transactions. The acquisition price for each option property is equal to the property’s cost to The Shidler Group. Pacific Office Properties Trust, Inc. is a real estate investment trust that acquires, owns, and operates office properties in the western U.S., focusing initially on the four high-growth markets of Honolulu, San Diego, Los Angeles, and Phoenix. The company is externally managed by Pacific Office Management, Inc., an affiliate of The Shidler Group. The company continues The Shidler Group’s institutional joint-venture operations, which focus on acquiring opportunistic and value-added commercial real estate in partnership with institutional co-investors. The Shidler Group is a private long-term investor in commercial real estate. Over the past 30 years, through its private and public affiliates, it has acquired, owned and managed more than 2,000 properties containing more than 150 million square feet of leasable area. In addition to the formation of Pacific Office Properties, The Shidler Group has founded three other publicly traded real estate investment trusts – Corporate Office Properties Trust, First Industrial Realty Trust, and TriNet Corporate Realty Trust.