Argosy Invests in Kapiolani
On November 30, 2015, Argosy Real Estate Partners III, L.P. and its parallel funds made a controlling investment in the acquisition of two adjacent properties currently improved with a 36,058 square foot flagship Walgreens store and a 73,103 square foot office building in Honolulu, Hawaii. The properties are located at a prime intersection in central Honolulu, directly across the street from the 2.1 million square foot Ala Moana Center mall. Ala Moana Center is one of the most successful malls in the United States, with 48 million visitors annually and sales of $2.9 billion in 2014.
The business plan for the project is to re-entitle the parcel containing the existing office building for redevelopment to a high-rise tower (likely for residential or mixed residential /hotel use). Re-entitlement of the parcel containing the office building will take advantage of new transit-oriented development zoning available due to the site’s location less than a quarter-mile from a planned light rail stop, as well as a density transfer of excess air rights from the Walgreens store. The partnership anticipates selling the Walgreens store (built in 2014) upon completion of the density transfer (which can be completed shortly after acquisition), and selling the redevelopment parcel that currently contains the office building after completion of the re-entitlement process to a vertical developer. The acquisition was financed by Honolulu-based American Savings Bank.
AREP III partnered with Mana’olana Partners, which has significant development and entitlement experience with comparable high-profile urban sites including several projects in Hawaii, and maintains close relationships with key local stakeholders.