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Hawaii trust sells land beneath Waikiki resort to iStar affiliate for $195M

Hawaii trust sells land beneath Waikiki resort to iStar affiliate for $195M

By Janis L. Magin  – Real Estate Editor, Pacific Business News

Sep 16, 2019, 8:14pm EDT

The Queen Liliuokalani Trust has sold the land beneath the Alohilani Resort Waikiki Beach for $195 million to Safehold Inc., a real estate investment trust affiliated with iStar Financial.

It’s the first Hawaii investment for Safehold (NYSE: SAFE), a REIT that specializes in ground leases and whose largest shareholder, as well as founder and manager, is iStar Financial (NYSE: STAR).

The acquisition includes the 2.5-acre parcel at 2490 Kalakaua Ave., but does not include the leasehold hotel, whose majority share was acquired by Commerz Real, an affiliate of the second-largest bank in Germany, for $515 million two years ago when it was still known as the Pacific Beach Hotel.

Prior to this sale, Queen Liliuokalani Trust owned a total of 16 acres in Waikiki, including the land beneath the Waikiki Beach Marriott Resort & Spa, as well as the land beneath the Hilton Waikiki Beach on Kuhio Avenue. The trust also owns the land beneath four condominiums in Waikiki: the Waikiki Banyan, the Waikiki Sunset, Foster Tower and Liliuokalani Gardens.

The trust last year acquired another property on Oahu, a mixed-use apartment building on Queen Emma Street near Downtown Honolulu. Da Kine Bail Bonds, the business owned by Duane “Dog” Chapman and his late wife, Beth, occupied a ground-floor retail space at the building until earlier this year.