Alexander & Baldwin Inc. is adding to its Hawaii commercial real estate acquisition spree with a deal to buy Pearl Highlands Center.
The Honolulu-based firm announced Thursday that it has agreed to buy the Pearl City retail center for $141.5 million from an affiliate of Boston-based real estate investment firm AEW Capital Management.
The sale, which includes assuming a $59.3 million mortgage, is expected to close in the second half of this year.
If completed, the sale will be the third acquisition of a Hawaii shopping center this year by A&B, which is pursuing a strategy to expand its portfolio of income-producing commercial real estate in Hawaii while selling similar properties on the mainland.
A&B bought Waianae Mall, a roughly 170,000-square-foot center on Oahu, in January for $30 million, and earlier this month completed a purchase of Napili Plaza, a 46,000-square-foot retail center on Maui, for $19 million.
Pearl Highlands is 415,000 square feet and anchored by Sam’s Club, Regal Theaters, Ross Dress for Less and 24 Hour Fitness. A Buffalo Wild Wings is slated to open soon in the complex, which A&B said is 98 percent leased.
Chris Benjamin, A&B’s president and chief operating officer, said the acquisition will make the company the second-largest retail landlord in the state.
"The addition of Pearl Highlands will boost our total Hawaii commercial (real estate) square footage over the 2 million-square-foot mark — a 25 percent increase," he said in a statement.
A&B has been working to concentrate its commercial real estate holdings in Hawaii since spinning off ocean transportation subsidiary Matson Navigation Co. last year and concentrating more on real estate operations that include commercial property ownership and residential development.
The Pearl Highlands deal represents the biggest transaction as part of this strategy to date.
Pearl Highlands was developed in 1993 by Japanese-based Takenaka International Ltd. and has changed ownership and undergone upgrades several times over the last decade or so after struggling financially in its early years.
The center was initially sold in 2000 to pension fund LaSalle Investment Management for $62.4 million.
LaSalle sold the property in 2004 for about $114 million to a Morgan Stanley investment fund.
In 2006, AEW Capital paid about $137 million for the center, according to property records.
