Maalaea shops change hands | News, Sports, Jobs

A Texas-based company has acquired the Maalaea Harbor Shops & Restaurants for $13.4 million, one of two shopping centers that cater to visitors that have sold in the past two months on Maui.

The other large mall that changed hands was The Shops at Wailea, which sold for $342 million in early August, according to state Bureau of Conveyances records. HART Wailea LLC, which lists its managing member as Heitman America Real Estate Holding in Chicago in state records, purchased the 16-acre The Shops at Wailea from The Mills Group, based in Honolulu.

The purchase of the Maalaea shops, previously known as the Maalaea Triangle, was finalized in late July. Maui Harbor Shops LP, which lists Paul Cheng as its officer, is the new owner, according to the state Department of Commerce and Consumer Affairs records. Cheng of Cheng Investments, based in Texas, has developed more than $1 billion of commercial and residential projects since 1978, according to the company’s website. Most of his work has been in Texas although he has also done projects in New York and other states.

Efforts to reach Cheng by email Thursday were unsuccessful.

The seller of the 3.8-acre property with about 40,000 square feet of commercial space was DMP Maui, a California limited liability company, and Jarvis Maui, a Hawaii limited liability company, deed records show. The two companies purchased the shops in 2007 for $12.9 million from the Maalaea Triangle Partnership, a Hawaii partnership, records show.

The center, with three buildings, has been assessed at $11.7 million, according to Maui County tax records. The Maalaea Harbor Shops houses eateries and stores including Beach Bum’s BBQ & Grill and the Pacific Whale Foundation’s Ocean Store.

Realtors said Thursday that shopping centers that cater to visitors are being scooped now up because of low interest rates on borrowing, high demand for income property and the “magic” of the Maui brand.

“Right now, the market is high. There is such demand for income property,” said Honolulu-based retail and real estate analyst Stephany Sofos, who has done business on Maui. “Interest rates are really, really, low. Money is very easy to borrow right now.”

She added that sellers are able to get a lot more for their properties because investors are willing to pay.

Charles Buckingham, vice president for Colliers International’s Maui Brokerage Services Division, echoed Sofos.

“I think it’s the seller taking advantage of the market or the real estate cycle that we are in,” he said.

Buckingham added that the cycle is in “an upward trend” with values appreciating. Agreeing with Sofos, he said that the “relatively cheap” cost of borrowing money is fueling the sales environment.

The Shops at Wailea and the Maalaea Harbor Shops largely target the tourist market. The Shops at Wailea houses a mix of high-end retailers and those catering to the resort crowd. Maalaea Harbor Shops leases to visitor-tailored businesses and caters to customers who come off boat tours at nearby Maalaea Small Boat Harbor.

Sofos said that investors may recognize the impact of visitors to Maui, which could be a reason why the tourist-related malls sold. Tourism is strong on Maui with a Hospitality Advisors report saying earlier this week that average daily hotel room rates of $336.26 and per room revenues of $253.54 on Maui set July records. The island’s July hotel occupancy rate was 75.4 percent, up 2.2 percentage points from last year.

Sofos said that Maui is known as the “wine and cheese” resort-type area, where affluent tourists from the Mainland visit the island and are attracted to places such as Wailea.

And during the economic downturns in 2007 and 2008, the tourist market on Maui wasn’t hit as bad as other areas, Sofos said.

“Maui has the magic name, everybody loves Maui, including me,” she said.

Another visitor-area mall is on the block. Maui Realtors confirmed that the Lahaina Cannery Mall is up for sale.

A message left with the Lahaina Cannery Mall management office was not immediately returned Thursday. An email to Terramar Retail Centers, which owns the mall, also went unanswered.

Lahaina Cannery Mall houses Safeway and Longs, its two largest and anchor stores, along with a food court and a majority of visitor-themed stores. It has a leasable area of 130,599 square feet, according to its website. No asking price was announced.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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