The buildings are currently 97% occupied under leases that expire at the end of 2012. One of the buildings and the parking garage are partially owned by its tenant, Macy's, which operates an 85,610-sf department store in the building. Lexington acquired a leasehold position in the Macy's department store in December 1996 for approximately $10.6 million.
"Through our leasehold investment in Macy's department store, we have been witness to the growth of the Downtown Honolulu market and the corresponding increase in property values," says Lexington EVP John Vander Zwaag, who describes the opportunity to purchase prime property in Downtown Honolulu as "rare."
Under current zoning, the super block could support approximately 600,000 sf of development. The property is said to be on of the few remaining redevelopment sites in urban Honolulu that is zoned for a 450-foot building.
Andrew Friedlander and Jon-Eric Greene of Colliers Monroe Friedlander in Honolulu had the disposition assignment. Lexington has no immediate plans to develop the property. It has retained Colliers Monroe Friedlander in Honolulu to lease and manage the property.
Lexington owns and manages office, industrial and retail properties net-leased to major corporations throughout the US. Earlier this year, Lexington and Newkirk Realty Trust Inc. entered into a merger agreement that is expected to be consummated before the end of the year.
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