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Aloha, All-Cash Buyers! Retail Center in Hawaii Sells for $50 Million

Aloha, All-Cash Buyers! Retail Center in Hawaii Sells for $50 Million

Special from National Real Estate Investor.

Cash buyers such as Newport Beach-based Stoneridge Capital Partners are leading the charge among investors returning to the commercial real estate arena. The private investment firm recently acquired the 180,300-square-foot Mililani Shopping Center in central Oahu for $50.25 million.

The firm’s all-cash offer was key to beating out nine other bidders for the community shopping center. The property sold in the first quarter at an 8.2 percent cap rate.

“Three out of five buyers today have a similar story,” says Mark Bratton, vice president of investment property sales at Colliers Hawaii in Honolulu. “They’re telling us that in 2005 they couldn’t touch anything because the pricing was too high, and now they’re able to buy properties at substantially higher returns.”

Mililani Shopping Center represents a hefty sale in a market where property sales have been lackluster due to financing constraints and a limited supply of quality investment properties. In fact, it is the largest sale to close in Hawaii yet this year.

Nationally, commercial real estate transactions across all major property sectors reached $15.6 billion in the first quarter. Although that is an improvement over the $10.5 billion in sales recorded during the same period a year earlier, it is still just a fraction of the frothy $48.1 billion that occurred during the first quarter of 2008, according to New York-based Real Capital Analytics. The research firm tracks sales in excess of $5 million.

Mililani Shopping Center sits on 12.8 acres and is anchored by Foodland, Ross Dress For Less and 24-Hour Fitness. The center also is home to more than 50 smaller tenants that include Starbucks, Blockbuster, Jamba Juice, Bank of Hawaii and Jack in the Box among others.

“People are flocking to quality, and this asset has a real strong history of staying right where it was and producing the same kind of income for the past three years,” Bratton says.

The Colliers Hawaii team of Bratton, Kim Scoggins and Nathan Fong represented the seller, Honolulu-based Alexander & Baldwin Inc., while Tom Lagos and Fred Cordova of Colliers Los Angeles represented the buyer.

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