Damon Estate's land sale completed

By David Butts
Advertiser Staff Writer

Newton, Mass.-based HRPT Properties Trust said yesterday it concluded the purchase of 224 acres of commercial property from Damon Estate and will work with tenants to extend leases in return for increased rent.

HRPT, a publicly traded real estate investment trust, paid $480 million for the property, in a deal that essentially eliminates the land holdings of Damon Estate, which until recently was the state's fourth-largest private landowner.

The land, most of which is located between Honolulu Harbor and the airport, is leased to 137 tenants, under 186 separate leases, with an average remaining term of 22.3 years.

"HRPT intends to work with existing land tenants to offer extended lease terms in return for rental adjustments," the company said in a news release. "The fact that these lands were primarily developed for warehouse uses and some parcels are now developed for shopping centers ... implies that as leases expire, the values of the lands owned by HRPT may increase."

HRPT expects that the Damon assets will generate about $37.5 million in average annual rent starting next year. HRPT owned 212 office properties worth $3.1 billion at the end of last year and bought 13 properties for $281 million this year through September. The Damon deal is the firm's largest acquisition.

Most of Damon's property covers 150 acres in Mapunapuna and Kalihi Kai, but the estate's holdings also include the Salt Lake Shopping Center, the Safeway at the corner of Pali Highway and Vineyard Boulevard, and property in Waipahu.

Estate trustees had been exploring options to end the trust as required upon the death of Samuel Mills Damon's last living grandchild, Joan Haig, who is in her 80s.

In July, Damon Estate sold 116,000 acres of Kahuku Ranch on the Big Island to The Nature Conservancy of Hawai'i and the National Park Service for $22 million.

The estate owns some Mainland property and other Hawai'i holdings, including a few thousand acres of conservation land on O'ahu not part of the 224 acre sale.

The trust was created upon the death of Samuel Mills Damon in 1924. Damon, the son of a missionary, was a partner in Bishop & Co., forerunner to First Hawaiian Bank, and was given the Moanalua ahupua'a — a land division from the mountains to the sea — by Princess Bernice Pauahi Bishop.

Reach David Butts at 535-2453 or dbutts@honoluluadvertiser.com