California-based Carmel Partners’ recent portfolio sale of nearly 1,000 apartment rental units on Oahu for $300.5 million is the largest multi-family project sale in Hawaii in 2014.
As PBN first reported, Carmel Partners sold its 520-unit Kalaeloa Rental Homes portfolio in West Oahu to a joint venture between the Boston-based real estate private equity firm, Rockpoint Group, and the California-based real estate investment firm, DiNapoli Capital Partners, for $154.5 million.
A few days later, the California-based real estate investment trust, Douglas Emmett Inc., announced that it purchased the 468-unit Waena Apartments in Honolulu for $146 million from Carmel Partners.
Located at 1320 Aala St., the property consists of 24 buildings on 12 acres and is about 97 percent leased.
Douglas Emmett’s total multifamily portfolio now consists of 10 properties totaling 3,336 units in West Los Angeles and Honolulu. Douglas Emmett also owns 61 office properties in Los Angeles and Honolulu, including Bishop Square, totaling about 15.3 million square feet.
David Asakura, partner and principal broker of Honolulu-based Commercial Asset Advisors, who represented the seller in this 988-unit portfolio, told PBN Friday that between 50 and 100 entities showed interest in the portfolio, although there were between five and 10 entities that showed serious interest in the properties.
“Multifamily apartment properties of this magnitude do not come to market often in Hawaii, and we had strong interest in the portfolio from a variety of mainland-based institutional investors, as well as a few local groups,” he said. “I believe the timing of these acquisitions will prove to be excellent for both buyers in the coming years. Kalaeloa should benefit from its proximity to Debartolo’s Ka Makana Alii regional mall project, as well as the numerous other commercial projects currently in development that will drive job growth in the Kapolei area. Similarly, Waena should enjoy an uplift from new projects in its surrounding area such as American Savings Bank’s new corporate campus, which will be just down the street, and Hunt Companies’ redevelopment of the Mayor Wright Homes site, which is just across the street.”
Chris Beda, senior managing partner and chief investment officer of Carmel Partners, previously told PBN that it sold the apartment portfolio as part of its overall investment strategy.
In 2012, the San Francisco-based private real estate investment firm specializing in multifamily transactions, purchased The Waterfront at Puuloa oceanfront rental community in Ewa Beach in West Oahu, now known as Kapilina Beach Homes, for $311 million from Hunt Cos., which was one of the biggest multifamily property transactions in the United States that year.
Beda said that the company is open to acquiring all types of apartment projects with at least 100 units on Oahu.
Carmel Partners has looked at some projects on Maui but most of its business will be done on Oahu, Beda said.
Rockpoint Group, which is familiar with the Hawaii market, with transactions involving the Four Seasons Hualalai Resort on the Big Island and the Courtyard by Marriott Waikiki Beach Hotel, couldn’t be reached for comment.
DiNapoli Capital Partners, which also is familiar with Hawaii, with such transactions involving the Aloha Beach Hotel on Kauai, declined comment.
Douglas Emmett did not respond to a message left by PBN on Friday.
Duane Shimogawa Reporter – Pacific Business News