Salem Partners Closes on Record Setting Sale of Walgreens Flagship Store in Honolulu
An affiliate of Los Angeles-based Salem Partners has sold the Walgreens flagship store at 1470-1488 Kapiolani Blvd. in Honolulu, HI for $42.25 million, or about $1,172 per square foot, to Bella Betty, Inc., a Korean investment firm in Los Angeles.
The sale represents one of the highest prices paid for a Walgreens store in the retailer’s history.
Built in 2015, the three-story, 36,058-square-foot drug store sits on eight-tenths of an acre in the Kapiolani submarket of Honolulu County. The store features significant signage on a block-through development lot with nearly 200 feet of linear frontage on each of Kapiolani, Keeaumoku and Makaloa Streets.
Walgreens will continue to fully occupy the freestanding building under a 15-year, triple-net lease with 12 renewal options.
“Walgreens is a great company and we are pleased it will continue to be our neighbor as part of a new hotel/condominium project we are proposing for the adjacent site,” said James Ratkovich of Salem Partners. “We are moving forward with the city and county planning department on an architecturally stunning project that will redefine the city’s skyline.”
Salem Partners is currently pursuing entitlements to redevelop the 1500 Kapiolani site immediately adjacent to Walgreens, across from Ala Moana Center. The developer has embraced the city’s new interim Transit-Oriented Development (TOD) ordinance with its planned redevelopment of the property and the nearby Mana’olana Place, which will bring the Mandarin Oriental Hotel back to Honolulu in a 36-story, 505,000-square-foot, mixed-use tower expected to deliver in 2021 at 1695 Kapiolani Blvd., near the Hawaii Convention Center, Ala Moana Beach Park and Ala Moana Center, the world’s largest open-air shopping destination.
“We are committed to continuing our momentum to re-establish Honolulu’s Ala Moana district as a top-tier destination,” said William Witte of Salem Partners, noting that both of Salem Partners’ Kapiolani Boulevard sites were previously occupied by distressed properties. “We recognize the transformative power of the new transit system for the area.”
Bella Betty financed its acquisition of the Walgreens property in-part with a new $22 million loan from Bank of Hope.
Carlos Lopez and Lee Csenar with Hanley Investment Group, along with a team from Eastdil Secured LLC, represented Salem Partners in the sale. Tom Lagos with Colliers International represented the buyer.