The Kaua‘i Village shopping center was recently sold for $26.9 million to a group of 22 investors. Passco Real Estate Enterprises, Inc. of Orange County, Calif., bought the eight-acre shopping village on Kuhio Highway in Waipouli for a buyer group
The Kaua‘i Village shopping center was recently sold for $26.9 million to a group of 22 investors.
Passco Real Estate Enterprises, Inc. of Orange County, Calif., bought the eight-acre shopping village on Kuhio Highway in Waipouli for a buyer group that includes themselves and 22 unnamed “small” investors from around the country, including Hawai‘i.
It’s the first property in the state purchased by Passco, but it won’t be the last, says Chief Operating Officer William Winn. “We’re looking to acquire additional property in Hawai‘i this year,” he said.
Winn confirmed that Starbucks Coffee and Jamba Juice will soon be tenants at Kaua‘i Village. “They should be in by the holiday season,” Winn said. Winn said that they will have to “relocate” some of their existing clients to accommodate the duo.
Meanwhile, improvements to signage, the parking lot, painting and lighting are the first improvements on the agenda. A “pedestrian bridge” linking Kaua‘i Village with the adjacent Waipouli Town Center is planned.
CB Richard Ellis representatives will continue to lease and manage Kaua‘i Village.
Passco has 6.5 million square feet of commercial property under management in Western states.
Passco used the “Tenant in Common,” 1031 tax-deferred exchange investment vehicle to purchase the property. The method purportedly helps investors defer long-term capital gains.
The uniquely structured deal puts institutional-quality properties within the reach of small investors, Winn said, and offers smaller investors an exact dollar-for-dollar percentage ownership without the hassle of actually managing the property themselves, or shouldering the total costs of the business.
Passco’s investors are typically older, with about $300,000 to $1 million to offer for property partnerships, Winn said. Passco provides asset management, property management, brokerage and investor advisory services through affiliates Passco Capital, Inc., Passco Property Management, Inc. and Stowe-Passco Development LLC.
The Kaua‘i Village shopping center was built in 1990, and has 113,495 square-feet of leasable floor space in six buildings that house nearly 30 businesses. It’s anchored by Safeway and Longs Drug Stores, and is the third-largest shopping complex on Kaua‘i, after Kukui Grove Center and the Coconut Marketplace. The shopping village is easily identified by its turn-of-the-century, plantation architectural design, three-story clock tower, and two “Whaling Wall” murals by environmental artist Wyland. Directly across Kuhio Highway, now-vacant, resort-zoned land is planned for resort development.
Phil Hayworth, business editor, may be reached at 245-3681 (ext. 251) or mailto:phayworth @pulitzer.net.
