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BlackSand Capital buys Honolulu building for $270m

BlackSand Capital has acquired Waikiki Galleria Tower, a retail building in Honolulu, Hawaii.

BlackSand Capital has acquired Waikiki Galleria Tower, a retail building in Honolulu, Hawaii. The purchase price is $270 million.


HONOLULU, Hawaii–(BUSINESS WIRE)–BlackSand Capital closed on the acquisition of Waikiki Galleria Tower on Friday, July 30, 2021, for $270 million. This acquisition makes BlackSand Capital a significant fee simple retail landlord on Kalakaua Avenue in Honolulu, Hawaii and returns a block of prime retail frontage along Kalakaua Avenue to locally managed ownership.

From Pacific Business News: “Hawaii-based BlackSand Capital closed on the acquisition of the Waikiki Galleria Tower Friday for $270 million, returning a block of prime retail frontage along Kalakaua Avenue to local ownership.

BlackSand Capital is working on a plan to redevelop the 75,000-square-foot two-story retail space fronting Kalakaua that was most recently occupied by DFS Group’s T Galleria. DFS declined an option late last year to extend its lease on the space it had occupied since 1999.

BlackSand Capital Chairman and CEO B.J. Kobayashi told Pacific Business News that BlackSand is working with Honolulu architecture firm Design Partners on conceptual plans for the project and has not yet selected a design architect.

Kobayashi said that luxury retail would most likely be the best use of the street front space along Kalakaua, which is considered one of top retail streets in the nation behind New York’s Fifth Avenue, Beverly Hills’ Rodeo Drive and San Francisco’s Union Square for both rents and prestige.

The tower is next door to the historic Gump Building, which is owned by LVMH and houses its flagship Louis Vuitton store, and is directly across the street from such luxury brands as Saint Laurent, Tiffany and Hermes at Royal Hawaiian Center. Prior to the Covid-19 pandemic, an entity tied to LVMH also bought two commercial condominiums beneath the Hokulani Waikiki by Hilton Grand Vacations Club.

Kobayashi also said there would be space for other retail concepts on the Royal Hawaiian Avenue side of the building.

‘Waikiki Galleria Tower is a significant transaction that represents BlackSand’s confidence in the Waikiki market, Hawaii’s economy, and our belief that Kalakaua is one of the best retail corridors in the country,’ he said.

BlackSand also owns the Kaimana Beach Hotel at the other end of Waikiki and the company’s office is located a block away from the Galleria tower in the Waikiki Business Plaza. That building, as well as the Waikiki Shopping Plaza, is also locally owned by members of the Mau family.

Kobayashi noted that his firm is largely owned by local investors, and a large part of the investor base is made up of local retirement funds.

‘We believe this investment can create long term jobs in Hawaii, such as construction opportunities, by on site local tenants and management positions, as well as supporting travel and tourism growth for Hawaii’s economy,’ he said.

The Galleria tower’s seller, 2222 SPE LLC, an affiliate of Sanno USA Inc., bought the 15-story building from Honolulu-based The Mills Group in December 2011 for $187.15 million.

About BlackSand Capital
Founded in 2010, BlackSand Capital is a real estate private equity firm distinguished by its integrity, creativity, and intimate knowledge of and commitment to the Hawaii market. It stands out as the only Hawaii-focused real estate private equity fund globally.

BlackSand Capital’s deep foundation in Hawaii rises from a multi-generational family legacy in the Hawaii real estate and construction market. The relationships created by decades of professional partnerships refine the firm’s acute understanding of real estate fundamentals and underpin its ethical responsibility to the community.

BlackSand Capital’s advantage is its focus on the local community, which is also reflected in the company. BlackSand Capital is a diverse and inclusive minority led company, where women hold leadership roles alongside men. All of BlackSand Capital’s employees are part of local families and have strong ties to Hawaii.

These enduring relationships along with the diversity and depth of experiences allow BlackSand Capital to capture rare opportunities often not presented in the market.