HRPT Picks Up Industrial Park Land for $115M-Plus

OAHU, HI-HRPT has increased its industrial land holdings here to one-fifth of the island’s total. The Newton, MA-based REIT this week closed on its acquisition of 118 acres here from the Estate of James Campbell for $115.5 million. The acquisition comes two years after it acquired the 224-acre Damon Estate industrial land portfolio for $480.5 million. Combined with other ownership on the island it adds up to 413 acres, which translates to a 20% market share.The 118 acres acquired this week are located on the southwest coast of Oahu, about 20 miles from Downtown Honolulu. These lands are part of the James Campbell Industrial Park, which is the largest industrial park in the state. HRPT says it used cash on hand and borrowings under its unsecured revolving bank credit facility to fund the purchase. The acreage is split into 41 parcels. The parcels are leased to 60 different tenants under 68 leases that have an average remaining lease term of 15 years. HRPT estimates current annual net operating income from the Campbell lands it acquired is approximately $8.7 million, which translates to an un-leveraged cap rate of about 7.5%.The land represents most of the Campbell Estate’s land holdings in the James Campbell Industrial Park, which was built in the 1950s. The estate sold most of the rest of the land to tenants over the past several years, according to published reports. Tenants of the land HRPT acquired include oil refiner Tesoro Corp. and AES Corp., which operates a power plant. An HRPT representative could not be reached Wednesday afternoon for comment. The company’s executive vice president Adam Portnoy has said the company is actively looking for other acquisitions in the Hawaii market. The company has been looking for office buildings in addition to industrial land, but is only interested in acquiring buildings where it can also own the underlying land and such opportunities are few and far between in Hawaii.