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HONOLULU-A&B Properties Inc. has signed a letter of intent to join a joint venture of The MacNaughton Group and The Kobayashi Group in the development of a 40-story residential tower on four acres overlooking Ala Moana Beach Park and the Pacific Ocean.

A&B’s total investment of equity and mezzanine debt in the $210-million project will be $40 million. Construction of “Hokua” is slated to start sometime this year at 1288 Ala Moana and be completed in late 2005.

Marketing for the project began in December 2002. Kobayashi Group Chairman Bert Kobayashi says sales contracts have been signed for 227 or 91% of the 247 residential units. “Buyers have been strongly attracted to the large apartment sizes…,” says Kobayashi.

The majority of the units will be two- and three-bedroom floor plans ranging from 1,500 sf to 4,500 sf square-feet. The three top-floor penthouses with private rooftop terraces will sell for upward of $4.5 million. Two-bedroom units range from $535,000 to $1.6 million and three-bedroom units range from $650,000 to $3.9 million.

Over the last four years, A&B Properties has acquired or invested in 15 Hawaii properties outside its core land holdings on Maui and Kauai. The company has 12 separate commercial and residential projects in various stages of development on Oahu, Maui, Kauai and the Big Island, with the largest being the Kukui’Ula project, a resort residential development planned for 1,045 acres, adjacent to the Poipu resort on Kauai.

In March, A&B acquired for $20 million a Downtown Honolulu office building that was developed for $77 million in the early 1990s. Known for its exterior glass elevator, the office tower has 5,500-sf floor plates and is 32% occupied. A&B’s Vice President of Acquisitions and Investments Mike Wright told GlobeSt.com that the company plans to “condoize” the building, portions of which have never been occupied.

The portfolio of The MacNaughton Group and The Kobayashi Group includes the Kukio Golf and Beach Club to the 760,000-sf Waikele Center. The MacNaughton Group also has developed, owns and operates all Starbucks and Jamba Juice Stores in Hawaii, and Kobayashi Group’s recent acquisitions include the Mililani Golf Course and the 450 room Ocean Resort Hotel.

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