Commercial investments up 142 percent in Hawai'i

By Andrew Gomes
Advertiser Staff Writer

Real-estate investors bought $2.1 billion in commercial property in Hawai'i last year, more than twice as much as the year before, according to an analysis of transactions valued at more than $1 million each.

The report by Honolulu real-estate firm Colliers Monroe Friedlander said the increased activity was driven by a more limited selection of available Mainland real estate, stock-market volatility and low-interest financing.

Mainland investors dominated many of the large purchases, though local and overseas companies also contributed.

Helping more than double the $868 million figure for commercial real estate sold in 2002 was the $480 million sale of the Damon

Estate's commercial property portfolio on O'ahu, a deal that accounted for almost a quarter of last year's transaction total.

Mike Hamasu, research director for Colliers Monroe Friedlander, said last year was the third year the company has tracked million-plusdollar sales, but that last year's huge volume probably rivals activity of the late 1980s, when many Japanese investors greatly overpaid for hotels, golf courses and other property.

"Prime Hawai'i real-estate holdings were snatched up in record numbers," Hamasu said in the report. "It was a good year."

The sales were well distributed over several property types. According to the report, there were:

• 29 industrial transactions, for $566 million;
• 14 hotel/golf transactions, for $532 million;
• 18 office transactions, for $490 million;
• 35 retail/mixed-use transactions, for $237 million;
• 22 land transactions, for $230 million;
• 23 apartment transactions, for $71 million.

Among some of the larger deals were First Hawaiian Bank's $192 million purchase of its downtown headquarters, Host Marriott's $321 million purchase of the Hyatt Regency Maui, Starwood's $85 million purchase of the Renaissance Wailea, and The Shidler Group's $90 million purchase of Davies Pacific Center and Pan Am Building.

Colliers said currently for sale are 133 properties with asking prices totaling $1.4 billion, mostly composed of 15 hotels for $1 billion.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.