It is clear now that opportunities exist everywhere. But how long will it last and many of us are actually taking advantage of these great buys. Are the opportunities slipping away because financing is not there or is our market beginning to turn around? I don’t really know, but the trends seem to show some bullishness in the Hawaii residential market. My first thoughts are that this is a Hawaii “thing”, Hawaii is isolated enough to keep a fairly stable real estate market. But its becoming more clear that may not be true. After all more and more key properties are being taken over by national firms and driving local ownership out. But it is abundantly clear that is a problem amongst itself…. That will be a another post.

Welcome back to King Kamehameha Hotel!

The new and improved hotel is complete and ready for your enjoyment.
This large undertaking by Investwest is a major ordeal, a much anticipate and much appreciated investment in Kailua Kona’s future. As many remember it the hotel was once the hub of the wheel for Kona and was the starting and ending point for many guest that came to enjoy Hawaii’s beautiful scenery.
So I say welcome back. Welcome back to the hotel and the glory that was once, and will again be the hub of Kailua Kona.

From the beautifully redone lobby, the respectfully appointed cultural artifacts displayed in the breeze way to the picturesq landscape of the pool side and the Hawaiiana comfort of the rooms; all of this breaths life back to this town.
Its not just a hotel its the beginning of a new era and the revitalization of Kona’s greatness.

In due time all of Kona’s beach front, dilapidated, properties will take the same action but until then, all of Kona should embrace the hard work and dedication Investwest has made. So help all of Kona by supporting the new King Kamehameha Hotel just as many events like Iron Man, Kona Brew Festival, the Bill Fish Tournament and many other great events that call the King Kamehameha Hotel home.

To support the new King Kamehameha Hotel, please visit us in June during our Retail Seminar and Hotel Open House.
This event will show case the entire hotel, developing our tourism in this market and give all of our potential Tenants the latest information on how to participate in our family of retailers.

Check out our latest floor plan of retail space. We are still looking for a few good retailers in the following categories:
Apparel
Jewelry
Sports Equipment and Apparel
Florist
Services
and many other creative avenues of retail…

Bring us your great ideas, we are open to all your retail ideas.

Over the years we’ve seen the phase and fad of local Aloha were, to designer wear to luxury boutiques and what seems now to be a full circle. Well maybe Aloha wear is dieing its own hard death, but in lower end categories, but local products are certainly beginning to make a come back.

With hope the need for localized products and retaining local flavor and excitement has brought the landlords to realize that this is what people want. Either that or the amount of willing ready and able (WRA) tenants are slim pickings for the time being and “you get what you get and you don’t get upset”.

But really local products is not just shopping, but cultural shopping. People seem to buy into cultures, idea’s and traditions of style, adopting styles of mix traditions to ultimately become the new youth culture or famous designer wear. This fashion and product offering is something that may only be found in a thrift shop or discount store paired with the designer dirty jeans from who knows where. But this is it, and we’ve got just what the market needs. Problem is its in someones garage or in the next flea market or products show and these proprietors just need a chance to get off the ground and the opportunity to capture the market.

However I’m my own worse enemy here….
As any body knows, most of these “creative” types or wonder product owners out there lack the intensity or know-how to actually make their “next big thing” something at all.
Maybe we can help!

Support your local retailers, from your thrift shop to your craft vendor. These are people with great ideas and drive that just needs to be nourished into a true retailing spirit.

Airport neighborhood space available for lease.

Wonderful space for sublease, very close to the airport, unique property, with large walk in fridge and built out office. Great for cold storage, food delivery, food use or any other clean use.

1,800 sqft
1,300 sqft walk in refrigerator
500 sqft built out office
Loading Dock
Parking
24 hr Access
3 – 10 year terms

$3,726 / month.
Move in ready, July 1st.

Click on the link below for more details and to download flyer.

3210 Ualena Street Flyer

If you’ve ever been to Waikiki, then you’ve been to the International Market Place and you experienced the charm of the old world Hawaii tourism.
The charm is still there and the good people that are vendors and entertainers in the marketplace thrive to this day.

For over ten years Coconut Willy’s establishment has been the haven of cold refreshments, simple food and live entertainment. Today the opportunity to continue this legacy of relaxation is here and ready for a good operator to take the establishment and breath new life into it.

Be the new proprietor of Coconut Willy’s location, inherit the travelers that seek out this location known for its good times.

As our local market is getting off to a promising 2010, we can only hope that our market will be moving forward. Moving forward from the lack of tourist, the lull of on the ground spending, the depressing lack of local employment and the staggering retail vacancies in all of our favorite places.

This is a dim glimmer of hope seems to be growing steadily with every announcement of new flights and the happy sold signs out front our islands everyday residences. Its not just that dim glimmer, but the general lessening of the gloom and doom stories are finally turning into opportunistic windfalls and, much less, decent decisions of moderate profits to be made for us little people.
But over all we can keep our hopes high and our efforts strong because we are far from being out of the woods.

Good luck with all that you do, and thank you for all that you contribute.

A Satisfied Mind

….thats it for now…

GRANDBRIDGE REAL ESTATE CAPITAL ARRANGES $63.2 MILLION LOAN
BEAVERTON, ORE. — Grandbridge Real Estate Capital has originated and closed a more than $63.2 million fixed-rate loan secured by Murray Business Center, a 332,000-square-foot suburban office building located in Beaverton. Funding for the transaction was provided by TIAA-CREF. The loan was made at 98 percent of appraised value with an interest rate of 5.61 percent fixed for the entire 21.3-year loan term. The transaction features an initial 39-month interest-only component with negative amortization, which converts to an 18-year amortization. Rob Meister of Charlotte, N.C.-based Grandbridge, a subsidiary of BB&T Corp., arranged the financing on behalf of a long-time client. The main tenant at Murray Business Center currently occupies 72 percent of the property with an unrelated, non-credit tenant occupying the remaining portion of the property until September 30, 2013, at which time the main tenant takes over the entire building.

LEE & ASSOCIATES HANDLES $8.75 MILLION INLAND EMPIRE OFFICE COMPLEX SALE
ONTARIO, CALIF. — Lee & Associates has negotiated an investment group’s $8.75 million purchase of Ontario Gateway, a two-building, multi-tenant professional office complex totaling 125,497 square feet in Ontario. Both the 73,974-square-foot Ontario Gateway I, located at 2151 E. Convention Way, and the 51,523-square-foot Ontario Gateway II, located at 2143 E. Convention Way, are two stories with freeway orientation. Tenants include SoCal Water, California Department of Consumer Affairs and the state’s Department of Health Services and Manpower. Lee & Associates’ Edward Indvik, Matthew Sullivan, David Mudge and Julia Corona-Thompson represented both the buyer and the seller, Jefferson-Pilot Investments, in the transaction.

CB RICHARD ELLIS CLOSES $3 MILLION INDUSTRIAL ACQUISITION IN THE SE VALLEY
MESA, ARIZ. — CB Richard Ellis has negotiated Alpine Valley Bread Co.’s $3 million acquisition of a 61,157-square-foot industrial building located at 300 W. Southern Ave. in Mesa. The manufacturer and distributor of natural and whole-grain bakery products will expand from its current 17,000-square-foot operations when it occupies the new building in early 2011. CBRE’s Joe Porter, Pat Feeney, Dan Calihan and Rusty Kennedy represented the buyer, in the transaction, and Diamond Pacific Investments’ Rick Mineweaser represented the seller, Paradise Valley, Ariz.-based Ol-Lonely Enterprises.

DALLAS — Blockbuster has announced its plans to voluntarily enter into Chapter 11 bankruptcy as a way to clean up the struggling company’s balance sheet. The recapitalization plan the company submitted to its senior noteholders aims to reduce its corporate debt from its present size of approximately $1 billion to $100 million or less.

As part of the restructuring process Blockbuster has secured a $125 million commitment in new “debtor in possession” financing from its senior noteholders what will allow it to continue normal day-to-day operations. The senior noteholders comprise a group of bondholders that possess approximately 80.1 percent of the prinicple amount of Blockbuster’s 11.75 percent senior secured notes. Upon its exit from bankruptcy, the company’s senior secured notes will be exchanged for equity in the reorganized company. The capital drawn down from the $125 million commitment will convert to an exit loan facility, and a new $50 million exit revolving credit facility will be created. Finally, there will be no recovery from holders of Blockbuster’s outstanding subordinated debt, preferred stock or common stock.

The company did not disclose how it plans to reduce its debt, only stating that “the company will evaluate its U.S. store portfolio with a view towards enhancing profitability of its store operations.” The company said that all 3,000 of its retail locations will remain open in the short term.

The move to Chapter 11 was not altogether unexpected. Blockbuster has been losing market share for years to online content providers such as Netflix despite its attempts to alter its business model. In addition to its stores, the company operates approximately 6,600 movie rental kiosks and has its own competitor to Netflix, which it calls Total Access. Last year, the company announced alliances with provider’s such as TiVo to provide content on demand. The company also reduced the number of its retail stores, closing approximately 1,000 of them since last September.

— Coleman Wood – Read the full story here.

With the company teetering on the financial brink, American Apparel (APP) is taking a step that may seem crazy: It’s holding a big summer-end sale. But giving up possible future revenue to get some cash in the door now is exactly what’s needed at the distressed apparel retailer.

The company has some items marked down as much as 50 percent, and coupons floating around Internet discount sites offer another 15 percent on top of that through the end of the month. That’s attention-getting, given that this chain doesn’t usually do season-end discounting. While it may seem like financial suicide to slash prices this much, there’s method to this madness.

Here are three reasons why American Apparel’s sale is a positive step for the company:

* Clean up the balance sheet. With deep debts, American Apparel needs to show as much revenue as it can as it preps for a likely bankruptcy filing. That will help the company line up the debtor-in-possession financing it will need for running the company in bankruptcy. The sale does two things: It adds to the revenue line while reducing inventory levels. So the company looks healthier in terms of generating cash, and it helps the company avoid the perception that it’s wrong on fashion trends and merchandise is sitting around collecting dust. (It may be wrong, but a positive inventory trend will make it look good for now.)
* Clear the way for the company’s new looks. Not sure it’s a great idea, but American Apparel is switching to a more preppy look. So likely a lot of the sheer buttless tights and mesh sleeveless tees that American Apparel has are on their way out anyway. Might as well clear the decks and get them out, or they’ll be piling up in a warehouse somewhere and creating storage overhead costs.
* Appeal to recession-era discount shoppers. Many retailers have struggled in the past two years because they refused to drop their prices. The fact is, many American consumers are on a massive bargain-hunt these days. By offering discounts, American Apparel may draw some new shoppers who hadn’t tried the chain before.

By Carol Tice – Please read the full article here.

Bankrupt shopping-mall owner General Growth Properties Inc. has agreed to pay the heirs of Howard Hughes $230 million for their remaining interest in a massive Las Vegas residential development called Summerlin, the final asset of the eccentric billionaire’s estate.

General Growth will take full ownership of Summerlin by paying the Hughes heirs $220 million in either cash or stock within 30 days of its exit from bankruptcy later this year, according to people familiar with the agreement. The company will pay another $10 million in cash to cover their advisers’ fees, these people said.

General Growth, which owns roughly 200 malls in the U.S., aims to emerge from bankruptcy in November. Its predecessor, Rouse Co., agreed in 1996 to buy Summerlin from the Hughes estate, establishing a 14-year payment schedule that was to culminate in late 2009 with a final, lump-sum payment for any Summerlin land remaining unsold to residential developers.

However, in the meantime, General Growth bought Rouse and then sought Chapter 11 bankruptcy protection in April 2009 after failing to refinance portions of its $27 billion debt load as they came due. Thus, resolving the final payment for the 7,500 acres that remain unsold in the 22,500-acre Summerlin development lingered as one of the final hurdles General Growth had to clear before exiting bankruptcy.

The settlement, finalized late Friday, ties up a loose end that had concerned investors and General Growth itself. Analysts had estimated that the final settlement of the claim could have cost General Growth from $100 million to $500 million, depending on the results of appraisals of the land.

“Investors just want a resolution one way or the other—that’s what they care about the most,” said Cedrik Lachance, an analyst with Green Street Advisors Inc. “The number is right in the middle of the fairway, from what I expected. It’s hard to estimate the value of the land.”

The settlement also closes the book on the liquidation of Mr. Hughes’s estate. The famously reclusive aviator, film director and entrepreneur bought the land in the 1940s as an inland base for his aerospace operations. When he died without children or a will in 1976, the land and other assets such as seven casinos, a helicopter maker, several aircraft and a bag of casino chips passed to his heirs and other beneficiaries.

That group now numbers more than 1,000 heirs and beneficiaries, including more than 200 people related to Mr. Hughes through aunts, uncles and cousins. The heirs so far have collected more than $1.5 billion from liquidating the estate.

The Summerlin sale wasn’t resolved until now because of the way Rouse and the Hughes heirs structured the deal in 1996. Uncertain of how to value the largely undeveloped property then, the two struck a deal in which, each year, Rouse was to pay the heirs half of its land-sale profits at Summerlin, which ultimately amounted to $570 million in total payments. The agreement called for completing the arrangement in late 2009, when Rouse would pay the Hughes heirs half the appraised value of any land remaining unsold.

However, the residential-land market swooned nationally during the latest recession and all but collapsed in Las Vegas. Thus, far more land was left unsold at the end of the contract—7,500 acres—than had been anticipated in 1996. And the value of that unsold land is now far less than it was during the boom.

The push to resolve the situation grew stronger in recent weeks as General Growth eyed its bankruptcy exit and appraisals of the Summerlin land were conducted. The 1996 pact called for the land’s value to be determined by three appraisals: one by General Growth’s appraiser, one by the Hughes heirs’ appraiser and a third by an independent appraiser. By last week, General Growth and the Hughes heirs had received their own appraisals but hadn’t divulged them to each other, according to people familiar with the matter. The third appraisal hadn’t yet been completed.

The $230 million settlement resolves concerns for both sides. For General Growth, it ends the Summerlin saga for a lower price than some had feared. For the Hughes heirs, it brings the certainty of payment in cash or General Growth stock, rather than in less desirable currency such as a note or stock in a company General Growth intends to spin off with its riskier assets.

The settlement will go before U.S. Bankruptcy Judge Allan Gropper in Manhattan for review.

General Growth intends to exit bankruptcy by way of a $7 billion recapitalization financed by Brookfield Asset Management Inc., Pershing Square Capital Management LP, Fairholme Capital Management and others. Upon its exit, General Growth will spin off a smaller company holding most of its riskier assets, including Summerlin, several office buildings and its Chicago headquarters. The larger company, which might keep the General Growth name, will retain roughly 175 of the malls.

Whether General Growth pays the Hughes heirs their $220 million in cash or stock will depend on the company’s liquidity upon its bankruptcy exit, a person familiar with the matter said. If it is stock, it will be stock in the larger General Growth, not the spinoff company, that person said.

The $230 million settlement was hammered out by Thomas Nolan, General Growth’s president and operating chief, and David Elkins, a lawyer representing the Hughes heirs.

Write to Kris Hudson at kris.hudson@wsj.com – Read the full story here.

Double-dip recession: probably not. Competition from the Internet: unfair. Lifestyle centers: Return isn’t worth the investment.

David Simon had a lot to say about the world of commercial real estate in speaking to members of the Economic Club of Indiana on Thursday at the Indiana Convention Center.

It was a rare public appearance for Simon, chairman and chief executive officer of Simon Property Group, and he admitted to the crowd that he’d rather not give a speech and just take questions. Nevertheless, he did both.

“We don’t do this a lot, but I think it’s a great opportunity for you to hear what we are doing in Indiana,” he said.

For example, there are 29 Simon properties in the state, bringing in annual revenue of $260 million. In Indiana, Simon pays $23 million in real estate taxes and generates $180 million in sales. The company employs 1,250 people and creates more than 20,000 jobs.

And while it’s well known that Simon Property is a Hoosier-born company, David Simon opened up his speech with a funny tidbit.

“We don’t really know when we were founded. We are doing some research on it,” he said to a laughing crowd of more than 700 people. “We think it was around 50 years ago. Once we find it, we do plan to celebrate our 50-year anniversary.”

After his prepared speech, Simon participated in what he wanted to do all along — answer questions from the audience. Here is a portion of the Q&A.

What is the likelihood of a double-dip recession resulting from the collapse of the commercial real estate market?

“I don’t think it will be because of commercial real estate, and I don’t think it will be a double dip. But I don’t think we can expect significant growth. Very simply, when you regulate more and you tax more, you are going to have less growth, and that’s the agenda that we’re on, by and large.”

What are your predictions for the upcoming holiday shopping season?

“I think the consumer is still under a lot of pressure, so I would be surprised if it’s robust. I think there is a high correlation between back-to-school and the Christmas season. Back-to-school was OK. My guess is Christmas will be OK. . . . The best stimulus that we can offer in America is confidence, and it’s cheap, right? I think if we have the confidence, frankly, we could kind of get out of the rut we’re in. ”

How has the Net impacted retail?

“The Internet is my biggest concern. Not to get on my soapbox, but the state of Indiana and other states have a real opportunity to level the playing field. Let me just explain one thing about the Internet. When you buy on the Internet, you don’t pay sales tax. When you go to the local mom-and-pop store and buy a blouse or anything else, you pay sales tax. Internet has a distinct advantage, which in my opinion, is unfair, and hopefully we’re looking for fairness in our tax system. If you sell it in the physical world versus the virtual world, it ought to be the same. It’s not happening. It’s killed records. It’s hurting books. . . . It’s had a marginal impact on apparel. I’m worried what will be next. We need to level the playing field tax-wise.”

What is the future of lifestyle centers?

“The lifestyle center was kind of the new project built over the last five or six years. I think that new development of that activity is done. . . . I think we are going to have retail real estate obsolescence. But I think what it will mean is the good retailers will gravitate toward where the retail center is, and in a lot of cases it’s the enclosed mall.”

What part of your properties is in downtown areas of cities?

“We’re in some dynamic places, but not a lot of what I would call true downtowns. Retail in downtown is a challenge unless you have a lot of residents there.”

Follow Star reporter Dana Hunsinger on Twitter at twitter.com/IndystarDana. Call her at (317) 444-6012.
Read the full story here.

Hawaii’s economy is largely dependent upon a healthy tourism industry which directly and indirectly impacts retailers and shopping centers. A recent tourism report indicated that Hawaii will finish this year at 6 percent ahead of last year in arrivals and expectations of growth in visitor spending will continue through 2011.

Both shopping centers and retailers continue to offer purchase incentives and exciting events to lure customers to the centers and with the current and projected increase in visitor traffic, retailers have seen a slight increase in sales.

Hawaii will host the prestigious APEC (Asia Pacific Economic Cooperation) Summit in November, 2011 which will be a big economic and publicity boost for the State. Will the shopping center and retail industries be ready to participate in the new economy?

Anne Kutaka –

Thanks for this update Anne!

Some retailers seem to be downplaying the importance of Black Friday, according to a Hay Group survey of 20 chains, few of which said they plan on running any Black Friday promotions. “It is likely [to be] the appropriate strategy for 2010 and beyond,” said Michael P. Niemira, ICSC’s chief economist and director of research. “Increasingly, it is important for the retail industry to smooth out those spending patterns throughout the season, instead of the increasingly spike‐prone selling periods that have dominated the holiday spending profile in recent years.”

Black Friday shopping trips have increased in recent years, but the amount of money people spend on those trips has been dwindling, according to the National Retail Federation. The association says some 195 million shoppers visited stores and Web sites over the Black Friday weekend last year, up from 172 million in 2008, but spending slipped to $343.31 per person, from $372.57 per person.

Economic realities are forcing many low-income shoppers to make most of their purchases at the end of the month, when they have just gotten paid or received government assistance money, a trend some are calling the “paycheck cycle.” In consequence, discount retailers are trying to devise ways to serve these customers.
“The paycheck cycle we’ve talked about before remains extreme,” Bill Simon, president of Wal-Mart U.S., told investors at a conference on Wednesday. “It is our responsibility to figure out how to sell in that environment, adjusting pack sizes — large package sizes the beginning of the month, small pack sizes at the end of the month — and to figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.”
These consumers are more likely to make “promotion-focused” purchases — those that make their lives better, even if in a small way, says Himanshu Mishra, a marketing professor at the University of Utah who has published research on the trend. “As the previous payday gets further away, consumers are motivated to choose products that are ‘prevention-focused’ — those that preserve their current standard of living,” he said. Mishra says retailers launching products would be smart to advertise them earlier in the month, when customers are more likely to have just been paid and are more receptive to new ideas.

Simon says it is commonplace for customers to arrive at Walmart stores at 11 p.m. on the last day of the month, fill their grocery baskets with basic items, and then mill about the store until midnight, when electronic government-benefits cards get activated. “Our sales for those first few hours on the first of the month are substantially and significantly higher,” Simon said. “The only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. If you are there at midnight, you are there for a reason. We have a commitment to serve those customers who need that. And we are very, very focused on that.”

Cedar Shopping Centers and RioCan bought Cross Keys Place, a 148,000-square-foot power center in Sewell, N.J., for $26.5 million.

Gallatin Plaza, of San Juan Capistrano, Calif., sold an eponymous, 64,265-square-foot neighborhood shopping center in Downey, Calif., to private investors for $11 million.