A California real estate investment trust yesterday became the biggest downtown Honolulu office landlord with the $232 million purchase of Bishop Square.

Douglas Emmett Inc. acquired the two-tower property that includes Tamarind Park on the block bounded by Bishop, King, Alakea and Hotel streets after buying two other downtown Honolulu office buildings in 2004.

Bishop Square is Honolulu’s largest office complex with 960,000 square feet of leasable space and about 200 tenants.

The property represents a jewel for Douglas Emmett, which paid what some observers regard as a premium price given the softness of Honolulu’s office market.

"It’s a big price," said Jaime Brown, president of local office property brokerage firm Hawaii Commercial Real Estate, which assisted with the transaction on behalf of the seller.

Brown said the purchase price of $242 per square foot was a dollar less than the previous comparable sale – 1132 Bishop (472,569 square feet), which Douglas Emmett bought in 2004 two years before Honolulu’s office occupancy rate topped out.

The acquisition gives Douglas Emmett control of 36 percent of top-quality, or Class A, office space in the downtown Honolulu central business district.

The company also rivals Pacific Office Properties Trust, a real estate investment trust established by local firm The Shidler Group, as the biggest owner of office space on Oahu. Both companies own about 1.6 million square feet of office space in the market.

"We have two big gorillas in town," Brown said.

Santa Monica, Calif.-based Douglas Emmett is a publicly traded company that owns 57 office properties with a combined 14.3 million square feet of leasable space, mostly in the Los Angeles area.

Jordan Kaplan, president and CEO of Douglas Emmett, said the company had its eye on Bishop Square since the firm acquired its first Honolulu property in 2004.

"Bishop Square has been widely viewed as the best business address in Honolulu’s (central business district) ever since it was first developed," Kaplan said in a statement.

The first piece of Bishop Square, the 30-story Pacific Tower (now known as American Savings Bank Tower), was developed in 1972 by Northwestern Mutual Life Insurance Co. The 28-story Pauahi Tower followed in 1983.

In 1989, the California Public Employees’ Retirement System bought a half interest in the property for $160.6 million, according to property records. Calpers and Northwestern Mutual sold the property to Douglas Emmett.

Douglas Emmett said Bishop Square is 91 percent leased. That compares with 90 percent occupancy for Oahu’s office market at the end of last year reported by local commercial real estate firm Colliers Monroe Friedlander. Oahu’s occupancy rate last year was at a four-year low, down from 93 percent in 2006.

But last year’s rate was still better than prior low points of 86 percent in 1998 and 2002.