The owner of Aikahi Park Shopping Center disclosed Thursday that it is preparing plans to renovate and reposition the Kailua retail complex.
Local real estate investment firm Alexander & Baldwin Inc. announced the planned move in a quarterly financial report but said detailed final plans will be shared publicly soon.
Chris Benjamin, A&B president and CEO, told stock analysts on a conference call that the company is keeping some Aikahi store spaces empty while also working with tenants, including anchor retailer Safeway, to extend leases in anticipation of the renovation.
| 2ND-QUARTER NET
$3 million
YEAR-EARLIER NET
$4.8 million
|
Upgrading the shopping center would come on the heels of ongoing enhancement work to other Hawaii retail properties owned by A&B, including Pearl Highlands Center in Pearl City and the former Macy’s department store in Kailua.
At Pearl Highlands where A&B previously renovated a movie theater and food court, the company said an ULTA beauty store will open Aug. 10 followed by a 19,700-square-foot Guitar Center store next year. Work to convert the Kailua Macy’s space into small retail shops at a cost of $21 million is nearing completion with initial tenants expected to open in October at the 50,500- square-foot complex A&B has named Lau Hala Shops.
The upgrades are expected to boost occupancy and rental income for A&B, which is the state’s second-largest retail property owner. A&B’s portfolio of retail, office and industrial space leased to tenants produced a $13.6 million operating profit in the second quarter, up slightly from $13.4 million in the same three months through June 30 last year.
A&B’s total profit, however, fell to $3 million in the recent quarter from $4.8 million a year earlier largely because of higher expenses and lower results from rock quarry and road paving subsidiary Grace Pacific.
Operating profit from the Grace subsidiary was $3.6 million in the second quarter, down from $6.7 million a year earlier. A&B said bad weather in April and internal challenges contributed to the decline.
In another segment of A&B operations — land sales and development — operating profit slipped a bit to $1.6 million in the second quarter from $1.7 million a year earlier. Much of this operating income was from selling residential property at resorts on Maui and Kauai.
Benjamin, on the conference call, emphasized A&B’s commercial real estate leasing work and said other segments of the company are on a path toward better results.
“Our core commercial real estate segment produced excellent results in the quarter,” he said. “I’m pleased by the progress we’re making in our operations and with our strategic agenda.”
Shares of A&B stock closed Thursday at $23.85 on the New York Stock Exchange before the earnings announcement and were on the lower end of a 52-week range between a low of $20.91 on June 16 and a high of $29.88 on Oct. 3.
