PacificBusinessNews-article

July 16, 2013

D’Olier: Kaneohe Ranch expected to make decision on Kailua property sale within 90 days

by Duane Shimogawa

Kaneohe Ranch Co. LLC and the Harold K.L. Castle Foundation are expected to make a decision in the next three months on the potential sale of the Kaneohe Ranch commercial real estate portfolio, according to Mitch D’Olier. He is president and CEO of the two entities that own the properties in question, including the highly coveted Kailua town center in Windward Oahu.
In an exclusive interview with PBN, D’Olier said that nothing has been decided yet. And, if the transaction, which could top $1 billion, doesn’t make sense for the Harold K.L. Castle Foundation, a sale won’t happen.
Meanwhile, Randy Moore, a foundation board member, says that the potential sale, first reported by PBN, followed an inquiry about the portfolio from a “financially viable and secure entity.” Moore declined to say if the inquiry came via a local firm.
“The family didn’t shop it, but decided to put it on the market to see what type of money they would get,” Moore told PBN.
The Honolulu Star-Advertiser reported on Tuesday that sources said the sale of Kaneohe Ranch could fetch up to $600 million, but that D’Olier declined to comment.
Read my wide-ranging interview with D’Olier, who will talk about what’s next for him and what that means for both the foundation and Kaneohe Ranch, in the Friday print edition of Pacific Business News.
Meanwhile, a source close to the situation told PBN that a number of Mainland institutional buyers, including REITs, or real estate investment trusts, from as far away as the East Coast are looking to enter the market and are interested in the portfolio, which includes a number of other Hawaii and Mainland properties.
PBN also confirmed that Alexander & Baldwin Inc. is interested in buying some or all of Kaneohe Ranch’s commercial real estate holdings in Hawaii, which include about 45 acres in Kailua town.
Chris Benjamin, president and chief operating officer of A&B, previously told me that his company is interested in looking at everything.
“As you can tell from what we’ve been doing lately [investing in Hawaii real estate], when we separated from Matson, we said we wanted to rededicate ourselves to Hawaii,” he told PBN in late May.
Other possible suitors include Black Sand Capital, a Honolulu-based real estate investment firm; Honolulu businessman Duane Kurisu; The MacNaughton Group, a Hawaii development company; The Howard Hughes Corp. (NYSE: HHC), the Dallas-based owner of Ward Centers; General Growth Properties Inc. (NYSE: GGP), the owner of Ala Moana Center; and even Larry Ellison, who owns 98 percent of Lanai and is CEO of Oracle Corp. (Nasdaq: ORCL).
In May, PBN obtained a private listing by Eastdil Secured, which marketed the possible acquisition of Kaneohe Ranch’s commercial real estate portfolio as a once-in-a-lifetime opportunity.