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OAHU, HI-A trio of investors have acquired 54 acres of industrial-zoned land in the Kapolei Business Park for $23 million. The joint venture of HG Capital, Lokahi Ventures and RSF Partners plans to subdivide it into 60 pieces, add infrastructure and then sell to users and developers on a fee simple basis.

Kapolei is a 32,000-acre master-planned city located 20 miles west of Downtown Honolulu. The property, which constitutes the entire second phase of the park, sits adjacent to the Kalaeloa/Barbers Point Harbor and the James Campbell Industrial Park. Scott Mitchell and Guy Kidder from the Honolulu office of Colliers Monroe Friedlander brokered the deal.

HG Capital is the lead investor, having invested $7 million in equity to the acquisition, which was closed with a land loan from the Bank of Hawaii. HG officials say the region’s strong growth and the overall shortage of available industrial-zoned land in Hawaii was the impetus for the purchase.

The Honolulu submarket has an exceptionally low industrial vacancy rate of approximately 1.7%, according to HG. In addition, HG says the Kapolei Business Park is one of the last industrial park alternatives expected in the near future on Oahu.

With hopes of making the lots more attractive than leasehold properties, which is the more common situation on the islands, HG says the lots will be sold on a fee-simple basis. HG executive vice president Andrew Jobst tells GlobeSt.com he hopes to have approval for the subdivision in the next three- to six months, after which it will begin marketing the properties. Colliers Monroe Friedlander will have the leasing assignment.

The first phase of the project, which has largely been sold off as building-ready lots to users and developers including HG, was about 70 aces. The first-phase land there was broken up into larger lots than will be in the second phase, says Jobst, whose company is about to break ground for a speculative 10-building, 106,000-sf park there that is available for lease or for sale on a fee simple basis.

Land sales in the first phase have been going for about $30 per sf. If all goes as planned, Jobst says he expects the phase-two land will meet or beat that price.

HG Capital LLC is a Menlo Park, CA-based real estate investment group that uses private equity to provide joint venture equity capital to real estate owners and developers for value-added and opportunistic real estate projects in the Western US. Lokahi Ventures LLC is a real estate company that focuses on development opportunities in Hawaii. Lokahi’s principals are Mark S. Whiting, formerly CEO of TriNet Corporate Realty Trust (acquired by Starwood), and Paul T. Lambert, formerly a managing partner of the Shidler Group and the founder of First Industrial Realty Trust. Information on RSF Partners was not readily available.

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