Maui retail center draws bids
By Andrew Gomes
Advertiser Staff Writer
Safeway Stores is considering offers to buy the majority of Maui's Piilani Village Shopping Center, which the grocery retailer developed in partnership and gradually opened over the last two years.
The Pleasanton, Calif.-based supermarket chain never intended to own the Kihei center long-term, but is selling sooner than expected because of performance of the project fed by relatively strong tourism and residential real estate development in the Kihei-Wailea area.
Wendell Brooks III, commercial division vice president of local real estate firm Chaney, Brooks & Co., which is marketing the center, said he could not identify prospective buyers or offering price.
The 140,770-square-foot center is expected to fetch close to its $30 million development cost, even with Safeway keeping ownership of its 56,000-square-foot store, according to one broker.
Brooks said Safeway developed the center so it could open a Kihei store, the company's largest of 18 in Hawai'i.
After opening the supermarket two years ago, the center gradually leased up space, which today is 100 percent filled with 32 tenants, including Roy's Restaurant, Hilo Hattie and ABC Stores.
Safeway has used such a strategy for years to control store development, according to Alan C. Beall, president of local development consulting firm the Beall Corp. "They're in the driver's seat when they do it that way," he said. "Once it's up and running they can sell it off and make a development profit."
Gary Kenar, a manager at Commercial Properties of Maui, which helped a medical complex lease space at the center, said the location and draw of Safeway has made the project a quick success.
"They have a heck of a market over here," he said, explaining that Wailea hotels and condos are drawing a lot of visitors who stop to purchase goods. Residential development in and around the master-planned Piilani Village subdivision is also adding to demand for center tenants.
Safeway, with a California development consultant, built the center on 15 acres in partnership with Haleakala Ranch affiliate Haleakala Properties and Baldwin Pacific Properties — the landowner and developer of the Piilani Village subdivision.
