Alexander & Baldwin Announces Three Transactions at Maui Business Park II

Rhea-AI Summary

Alexander & Baldwin, Inc. announces build-to-suit lease and sales at Maui Business Park Phase II in Kahului, Maui. The final phase of subdivision offers commercial development opportunities with build-to-suit, ground lease, and fee purchase options. The County of Maui purchases land for a new transportation facility. A&B plans to complete infrastructure improvements by early 2026.

Real Estate Market Analyst

The announcement by Alexander & Baldwin, Inc. regarding the final phase of their Maui Business Park Phase II project indicates a significant development in the commercial real estate sector in Hawai'i, particularly on the island of Maui. The sale of 12.5 acres to the County of Maui for $17.4 million underscores the scarcity of industrial and retail land in Central Maui, which can drive up land values in the region. The diversity of the park's offerings, including warehousing, distribution, light manufacturing, retail and office uses, caters to a broad range of commercial needs. This versatility can attract various businesses, potentially leading to a multiplier effect on the local economy through job creation and increased commercial activity.

With the build-to-suit lease for a national food manufacturer and distributor, A&B is tapping into the growing demand for specialized industrial spaces that support the logistical needs of companies. The development of a Class A warehouse and distribution facility can be seen as a response to the e-commerce boom and the consequent need for efficient supply chain solutions. This strategic move may also serve as an indicator of the health of the industrial real estate market and could influence investor sentiment towards A&B's stock.

The infrastructure improvements and the availability of land for build-to-suit, ground lease, or fee purchase as condominium units demonstrate A&B's commitment to long-term value creation. The early availability of lots for build-to-suit and ground leases before the completion of the subdivision may appeal to businesses seeking to establish a presence in Maui quickly. This strategy of selling or leasing land in increments could result in a steady stream of revenue for A&B over the next few years, potentially impacting its financial performance and attractiveness to investors.

Construction Industry Analyst

The construction of a new facility for the County of Maui's Department of Transportation by the County itself signifies a substantial investment in local infrastructure. This project could have broader implications for the construction industry in the region, potentially leading to increased demand for construction services, materials and labor. The multiplier effect of such a large-scale project can stimulate further economic growth in the area.

Additionally, Hamai Appliances, Inc.'s purchase of two lots for the expansion of its operations with a new showroom and service center reflects the confidence of local businesses in the region's economic prospects. The decision to expand in the current economic climate may indicate underlying strength in the local consumer market, which could be a positive signal for other retail and service-oriented businesses contemplating expansion.

It is also important to consider the timeline for the completion and occupancy of the new facilities, with the expected date in the fourth quarter of 2025 for the food manufacturer and distributor's facility and the early 2026 target for finished lots. Delays in construction timelines are not uncommon and can affect the expected benefits to the local economy and A&B's revenue projections. As such, monitoring progress against these timelines will be crucial for stakeholders.

Local Economic Development Expert

The development of Maui Business Park Phase II is poised to have a considerable impact on the local economy of Kahului, Maui. The creation of a new bus hub, maintenance facility and secure fleet storage by the County of Maui represents a significant investment in public transportation infrastructure, which can enhance connectivity and accessibility for residents and businesses. Improved transportation facilities can lead to increased economic activity and may attract additional investment in the region.

The involvement of a national food manufacturer and distributor relocating to the new industrial lease space indicates a strengthening of the local job market and may lead to secondary economic benefits such as increased demand for housing and services. The park's strategic location along Ho'okele Street, a highly trafficked main thoroughfare, could offer high visibility for businesses, potentially increasing customer foot traffic and sales for retail and service businesses located within the park.

Furthermore, with limited parcels available for development in Central Maui, the completion of this project could mark a critical juncture for the region's commercial real estate market. It may set a precedent for future commercial real estate pricing and development patterns, influencing both local and external investors' decisions. The project's success could also encourage other developers to invest in similar projects, thereby fostering a competitive and vibrant commercial real estate market in Maui.

Final Phase of Subdivision Provides Unique Commercial Development Opportunities in Kahului, Maui

HONOLULU, Feb. 21, 2024 /PRNewswire/ -- Alexander & Baldwin, Inc. (NYSE: ALEX) ("A&B" or "Company"), a Hawai'i-based company focused on owning, operating, and developing high-quality commercial real estate in Hawai'i, announced a build-to-suit lease and two sales at its Maui Business Park Phase II (MBP II) project in Kahului, Maui.

The first transaction is a build-to-suit industrial lease to develop a Class A, 29,500-square-foot warehouse and distribution facility on two lots totaling 2.4 acres for lease to a national food manufacturer and distributor. The tenant will relocate their existing operations in Central Maui. Completion and occupancy of the facility is expected in the fourth quarter of 2025.

Additionally, the County of Maui initiated the purchase of 12.5 acres in the business park's final phase of horizontal development for $17.4 million, which will close upon subdivision completion. The County plans to construct a new facility for its Department of Transportation, encompassing a bus hub, maintenance facility, and secure fleet storage.

With 21 remaining lots ranging from one-half to five acres, the project's final increment allows for warehousing, distribution, light manufacturing, retail, and office uses. It represents the last opportunity to own or lease commercial space fronting the park's highly trafficked main thoroughfare, Ho'okele Street. A&B has commenced the subdivision process and intends to complete all infrastructure improvements required to deliver finished lots in this final increment by early 2026. Land in this final increment is currently available for build-to-suit, ground lease, and fee purchase as condominium units prior to subdivision completion, allowing users to permit and construct their vertical improvements concurrently with horizontal build-out.

The second sale consists of two of the remaining lots available in the park's initial increments, totaling 1.3 acres, sold to Hamai Appliances, Inc., for $2.4 million earlier this month. This local, family-owned retail business will build a showroom and service center to expand its current operations in Kahului to better serve its Maui clients.

"We are encouraged by the momentum and diversity of leasing and sales activity at Maui Business Park Phase II," said Jeff Pauker, chief investment officer at A&B. "With limited parcels available for industrial and retail use in Central Maui, we're pleased to commence infrastructure work on the Company's final subdivision increment within the park to create additional land inventory for future A&B development or parcel sales."

Pauker continued, "Adding new inventory is an opportunity for users to expand or enter the market through build-to-suit or ground lease opportunities with A&B or as land purchasers, all of which will contribute to the local economy and reinforce our long-standing commitment to the Maui community."

Maui Business Park Phase II is represented by Colliers. 

ABOUT MAUI BUSINESS PARK PHASE II
Maui Business Park Phase II is a 125-acre, mixed-use development near the Kahului Harbor and Kahului Airport, with immediate and easy access to all parts of Maui Island. The park has successfully attracted national, regional, and local businesses, establishing itself as Maui's prime neighborhood retail and industrial submarket. Sales are underway for lots ranging from one-half to five acres located within an Opportunity Zone, affording potential tax deferral benefits to qualified land purchasers. For more information on parcels available for sale or leasing opportunities at Maui Business Park Phase II, visit https://www.mauibusinessparkphase2.com or contact Bill Froelich at william.froelich@colliers.com.

ABOUT ALEXANDER & BALDWIN
Alexander & Baldwin, Inc. (NYSE: ALEX) (A&B) is the only publicly traded real estate investment trust to focus exclusively on Hawai'i commercial real estate and is the state's largest owner of grocery-anchored, neighborhood shopping centers. A&B owns, operates, and manages approximately 3.9 million square feet of commercial space in Hawai'i, including 22 retail centers, 13 industrial assets, four office properties, and 142 acres of ground leases. A&B is expanding and strengthening its Hawai'i CRE portfolio and achieving its strategic focus on commercial real estate by monetizing its remaining non-core assets. Over its 154-year history, A&B has evolved with the state's economy and played a leadership role in developing the agricultural, transportation, tourism, construction, residential, and commercial real estate industries.

FORWARD-LOOKING STATEMENTS
Statements in this release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding possible or assumed future closings of transactions and business results. Such forward-looking statements speak only as of the date the statements were made and are not guarantees of future performance. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from those expressed in or implied by the forward-looking statements. These factors include, but are not limited to, prevailing market conditions and the Company's business generally discussed in the Company's most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission. The information in this release should be evaluated in light of these important risk factors. We do not undertake any obligation to update the Company's forward-looking statements.

Learn more about A&B at www.alexanderbaldwin.com.

Contact: Andrea Galvin; 808-525-8404; agalvin@abhi.com

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SOURCE Alexander & Baldwin, Inc.

What is the latest announcement by Alexander & Baldwin, Inc. regarding Maui Business Park Phase II?

Alexander & Baldwin, Inc. announced a build-to-suit lease and two sales at its Maui Business Park Phase II project in Kahului, Maui.

What type of facility is being developed through the build-to-suit industrial lease at Maui Business Park Phase II?

A Class A, 29,500-square-foot warehouse and distribution facility is being developed through the build-to-suit industrial lease.

What is the expected completion timeline for the build-to-suit industrial lease facility at Maui Business Park Phase II?

Completion and occupancy of the facility is expected in the fourth quarter of 2025.

What is the County of Maui's plan for the purchased land in the business park's final phase of horizontal development?

The County of Maui plans to construct a new facility for its Department of Transportation, including a bus hub, maintenance facility, and secure fleet storage.

What are the available options for users interested in the final increment of Maui Business Park Phase II before subdivision completion?

Users can opt for build-to-suit, ground lease, and fee purchase as condominium units before subdivision completion.