Alexander & Baldwin Buy Kahala Properties Owned By Genshiro Kawamato for $98 Million

Alexander & Baldwin Properties, Inc. announced today that it has acquired a portfolio of 31 properties from Japanese real estate investor Genshiro Kawamoto for approximately $98 million. Twenty-seven of the properties are located on Kahala Avenue, Honolulu’s premier residential address, which runs along the ocean from Diamond Head to Waialae Country Club, home of the Sony Open, and the world-famous Kahala Hotel & Resort. The 27 properties represent nearly 16% of the residential lots on Kahala Avenue, with about half of the lots having ocean frontage or beach access. A&B plans to reposition and refurbish the properties to take advantage of the continuing improvement in the Honolulu real estate market.

278 House on Kahala Avenue Honolulu

278 House on Kahala Avenue Honolulu (Photo credit: MattSims)

“The opportunistic acquisition of this highly coveted residential land portfolio in Hawaii represents a significant investment in a key Oahu market and reflects A&B’s confidence in Hawaii’s economy and real estate markets,” said Christopher J. Benjamin, A&B’s president & chief operating officer. “From a strategic perspective, the transaction highlights our competitive strengths in Hawaii. We were able to leverage our local market knowledge and relationships to complete an off-market transaction at attractive pricing. Our experience and balance sheet strength allowed us to negotiate and close the all-cash deal in less than 90 days, once the seller indicated a willingness to sell, and we anticipate achieving investment returns consistent with our past Hawaii investments.”

“Through this transaction, we have acquired a significant position in Kahala real estate — nearly 90% of the current inventory on Kahala Avenue, a well-established, world-class residential Honolulu community for local and offshore homeowners,” noted Michael G. Wright, executive vice president, A&B Properties. “We will be focused on cleaning up these properties, and anticipate a full recovery in property values. This acquisition is truly a once-in-a-lifetime opportunity, and we are gratified to see our efforts come to fruition.”

280 House on Kahala Avenue Honolulu

280 House on Kahala Avenue Honolulu (Photo credit: MattSims)

The acquired portfolio includes 27 fully entitled Kahala residential properties encompassing 13.7 acres, as well as two residential lots and a preservation-zoned parcel in Windward Oahu, and a 146-acre agricultural-zoned parcel in Kihei, Maui. The Kahala residential properties include eight oceanfront lots (6.5 acres); one oceanfront home/lot (0.8 acres); five non-oceanfront lots (1.7 acres) and one home (0.2 acres) located on the makai, or ocean, side of Kahala Avenue; and six lots (2.4 acres) and six homes (2.1 acres) located on the mauka, or mountain, side of Kahala Avenue. The land-only component of the tax assessed value of the 31 properties acquired totals $117.6 million. Sales will commence immediately and continue over a projected three- to five-year timeframe.

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