Hawaiian Office Landmarks for Sale!

Pacific Office Properties--the largest owner of office buildings in Honolulu--is considering selling six of its buildings to improve its financial standing. The move could result in a new owner controlling nearly 10 percent of the market. The San Diego-based company, founded by local commercial real estate investor Jay Shidler, announced recently that it had retained a broker to explore selling the six-property portfolio or finding a partner to invest in it.

The move follows unsuccessful attempts by Pacific Office Properties to raise capital to reduce its debt and grow its assets. It chose Wells Fargo & Co. subsidiary Eastdil Secured LLC to interest buyers or investors in the Honolulu office buildings. The effort might not result in a transaction, but, if it’s successful, could dramatically reshape the geography of Pacific Office Properties’ holdings and make someone else the largest office building owner in the city.

Commercial real estate brokers said such an opportunity is rare in the local marketplace. “It’s going to be an opportunity for somebody to get a stranglehold on the market,” said Kalani Schrader, executive vice president in the office division at CBRichard Ellis. “It’s a big-ticket portfolio,” he added.

Collectively, the six properties comprise almost 1.5 million square feet of leasable space, or almost 10 percent of Honolulu’s office market. The properties up for grabs are situated from downtown to Waikiki--Waterfront Plaza, Davies Pacific Center, the Pan Am Building, First Insurance Center, Pacific Business News Building, and Clifford Center. The biggest property in the group is Waterfront Plaza, which includes Restaurant Row and contains 534,475 square feet of leasable space. “We’re going to see what the market offers us,” said Larry Taff, executive vice president, Hawaii operations, Pacific Office Properties, which was founded in 2008 using two of Shidler’s San Diego and Phoenix properties as collateral.