Damon Estate offering to sell O'ahu property
By Andrew Gomes
Advertiser Staff Writer
The Damon Estate is selling its entire portfolio of commercial property on O'ahu, which could bring an estimated $400 million and lead to the redevelopment of large commercial tracts in Honolulu.
The sale of the property, which has been quietly offered to groups of investors in and outside Hawai'i, could result in one of the largest transactions of commercial property in Hawai'i, and would transfer ownership of the most valuable asset of the state's fourth-largest private landowner.
But the estate said the offering is only one option being considered by trustees, and that the effort may not result in a sale. The estate plans to sell in one chunk the entire portfolio, which consists primarily of 221 acres of leasehold land mostly between the airport and Honolulu Harbor, and is not accepting offers on individual parcels.
"Trustees will not make that decision until they have better information in their hands," said Tim Johns, Damon Estate chief operating officer.
Johns said other options include holding the property long term through an entity set up to succeed the trust, which expires upon the deaths of Samuel Mills Damon's last two living grandchildren, who are in their 80s. There are about 20 beneficiaries of the trust.
No timetable on a decision has been disclosed, though it will depend largely on the price of offers received for the O'ahu portfolio.
Any offers would be subject to approval of estate beneficiaries and trustees. If completed, a sale would largely eliminate the land holdings of the trust, which is expected to complete a sale of the bulk of its largest asset — 115,000 acres of the 117,000-acre Kahuku Ranch on the Big Island — today in a $22 million transaction with the National Park Service and the Nature Conservancy.
The estate also has some Mainland property and other Hawai'i holdings, including a few thousand acres of conservation land on O'ahu, not included in the sale offering, a copy of which was obtained by The Advertiser.
According to the offering by real estate firm Eastdil of Santa Monica, Calif., the property includes leased fee interests in about 150 acres in Mapunapuna, as well as the Salt Lake Shopping Center, the Safeway at the corner of Pali Highway and Vineyard Boulevard, and property in Moanalua and Waipahu.
In all, there are almost 200 lessors on Damon Estate land, and almost half of the leases expire within 20 years, creating what Eastdil calls "an exceptionally rare opportunity" to control and redevelop numerous parcels. Most of those leasing the land are the owners of commercial, industrial and retail businesses.
The portfolio is projected to generate about $32 million in net operating income for the owner next year, rising to $36 million by 2009, according to Eastdil's financial forecast.
The Damon Estate 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 bequeathed the Moanalua ahupua'a — a land division from the uplands to the sea — by the sister of Queen Liliu'okalani.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
