KAPA‘A — A Hawai‘i mega-chain has purchased Coconut Marketplace.
SMK Inc., the real estate arm of ABC Stores, bought the marketplace in March for an undisclosed price, The Beall Corp. retail real estate president Cory Beall said on Thursday.
“ABC sees it as a fantastic retail location and resort retail environment,” Beall said. “Plans are all preliminary at this point, but they will likely include an ABC Store or Island Gourmet Market, which is their island grocery store concept, and physical improvements to add curb appeal and drive customer traffic.”
Beall said exterior improvements to the center’s traffic flow and interior improvements to the courtyard are also being considered.
The Beall Corp., a property management company specializing in resort retail, is the Coconut Marketplace’s new leasing and management representative, replacing CB Richard Ellis.
Other past and present Beall-affiliated properties on Kaua‘i include Princeville Center, St. Regis Princeville Resort, Kaua‘i Beach Resort and the Islander Shops located next to Coconut Marketplace.
“The new owner is great news to the community, because it’s a local company sensitive to local culture and the tenants,” Beall said, adding that there has been a strong level of interest in leasing by both restaurants and retailers.
Coconut Marketplace is one of eastern Kaua‘i’s largest retail centers, comprising 66,000 square feet of retail space on 7.6 acres. Current occupancy levels are at about 30 percent, Beall said.
The last change in ownership occurred in 2009, when the property went into foreclosure, Kaua‘i County property tax records indicate.
The county assessor in 2012 valued the building at $11.15 million and the land at $6.45 million. The land value assessment in 2011 was $7.3 million, representing nearly a 10 percent decrease in one year. The building’s value remained the same.
The total $17.6 million assessment for 2012 is more than $14 million, or 43 percent, shy of its $32 million mortgage, indicating that the property may have been severely under water.
Last summer, the leasing arm of CB Richard Ellis said retail rents at the marketplace were $2.50 to $3 per square foot. There were no plans for renovation, and occupancy was about 50 percent.
A walk-through, however, seemed to indicate the occupancy level was closer to 30 percent following a rent strike by tenants and several evictions.
“The past (troubled) relationship with tenants is over,” Beall said. “We’re optimistically looking toward the future.”
ABC’s sundries, novelties and snacks stores employ more than 900 workers at 78 locations in Hawai‘i, Guam, Saipan and in Las Vegas, ABC’s website states. The company is based in Honolulu. Of its 56 locations on the Hawaiian Islands, 37 are located in or near Waikiki and two are on Kaua‘i.
In May 2011, the company purchased from Alexander and Baldwin’s Kukui‘ula Development Co. a 4.2-acre lot at 4425 Lawa‘i Rd. across from Kukui‘ula Village shopping center near the roundabout in Po‘ipu. The assessed value of the property at that time was $2.02 million.
ABC Stores President Paul Kosasa has said there were are no immediate plans to develop the site.