The Kele Center, located on the island of Maui in the city of Kahalui, was recently sold. The mall is approximately 14,820 square feet. foot and sold at a price of $4,925,000. Anchored by Denny’s, Super Cuts, Rent-A-Center, and Edward Jones restaurants, this well-located community center was a great investment for the new owners. The property is located just outside the airport and close to Borders, Sports Authority, Lowe’s and Costco. The property sits on a plot of approximately one hectare. This commercial investment in Hawaii will provide a return of nearly 10% to the new owners of this property.

This is another example of a substantially higher rate of return (CAP Rate) than investors could achieve just 24 months ago. While it took a large capital investment in today’s financial environment, owners will be rewarded for making a move right now in the market.

I think 2009 and 2010 will be considered low points in the Hawaii Commercial Real Estate cycle.

Pearlridge Mall and Mall is the second largest shopping center in the state of Hawaii. This property has a great mix of tenants and is well-suited for the commercial area it serves. Over the years the owners and management have done a very good job juggling tenants and providing an environment where tenants can thrive. Center sales per square foot are very high for similar and comparable centers. The mall is anchored by Macy’s, Sears, and a new Bed, Bath & Beyond store (the first in Hawaii), as well as numerous restaurants.

This mall will sell in today’s market. It is located on a land lease that will deter some investors from the market due to the potential uncertainties of long-term land tenure.

The center’s past success, current mix of tenants, and strong, steady performance will attract a new owner to this property.

That owner is likely to reinvest in the property, since its last major renovation was over a decade ago.

With a lack of capital in the market, we expect the buyer to demand a high rate of return and feel that at this low point in the market they will be handsomely rewarded.