Honolulu-based Alexander & Baldwin will become a private company in a $2.3 billion deal set to close early next year.
A&B, the only publicly traded real estate investment trust focused solely on Hawai‘i commercial real estate, announced Monday it had entered into a “definitive merger agreement” wherein a joint venture group that includes MW Group, a privately held Honolulu-based, commercial real estate developer, with funding from Blackstone Real Estate and DivcoWest, will acquire all outstanding A&B common shares.
President and CEO Lance Parker said in the Dec. 8 announcement that the company is taking “an important step toward our long-term vision for A&B as stewards of Hawai'i's premier commercial real estate.”
“As a private company supported by the deep real estate expertise and experience of our new ownership group, A&B will have greater capacity to serve its tenants and communities. In our next chapter, we will continue focusing on real estate that supports the daily lives of residents, overseeing our properties with care and remaining steadfast in our role as partners for Hawai'i," he said.
A&B is the largest owner of grocery-anchored shopping centers in the Islands, owning, operating and managing about 4 million square feet of commercial space. That includes 21 retail centers, 14 industrial and four office properties, along with the fee simple interest in 146 acres of ground-lease assets.
As part of the transaction, shareholders will receive $21.20 per share in cash for each share of A&B common stock they own, the announcement said, a 40% premium to the stock’s closing price on Dec. 8.
According to the announcement, the transaction was unanimously approved by A&B’s Board of Directors and is set to close in the first quarter of 2026, pending “customary closing conditions, including approval by the company’s shareholders.” Once complete, A&B’s common stock will no longer be listed on the New York Stock Exchange.
The board is chaired by Eric Yeaman, founder and managing partner of Hoku Capital LLC, and includes directors Shelee Kimura, president and CEO of Hawaiian Electric Co.; Diana Laing, retired chief financial officer of American Homes 4 Rent; John Leong, co-founder and CEO of Kupu and Pono Pacific Land Management, LLC; Lance Parker; and Douglas Pasquale, founder and CEO of Capstone Enterprises Corp., the A&B website notes.
“We're pleased to reach this agreement, which delivers significant, immediate and certain value to our shareholders while strengthening A&B's ability to serve the diverse needs of communities across Hawai'i," Yeaman said in the announcement. "The Board is confident that today's news is in the best interests of all of A&B's stakeholders. It delivers a substantial cash premium for shareholders and long-term benefits for our valued employees, tenants and communities."
In a letter to employees, filed with the U.S. Securities and Exchange Commission, Parker wrote that the unanimous decision meant that he, too, "voted in support of this new direction because we believe it is the right step for A&B's long-term success."
"As a company geographically focused in a local market, the structure and pressures of the public markets are not ideally suited to where A&B is today or where we aspire to go," he wrote. "As a private company, we won’t have to worry about moving the stock price, we can simply focus on strengthening the company, supported by partners who share our vision for Hawaiʻi’s future."
Following the closure of the deal, A&B will keep its name, brand and Honolulu headquarters, and will continue to be led by a Hawai‘i-based team, the announcement said.
In an email to Aloha State Daily, A&B says that the new ownership group has been "highly impressed by the full A&B team through this process, and our depth of local expertise is one of the reasons they were eager to partner with us in this transaction."
As it relates to specific leadership roles, A&B says that many details still need to be determined and relevant updates will be provided, as appropriate, throughout the process.
For employees, it's "business as usual at A&B as we work to complete this transaction," the company says.
The investor group also intends to spend more than $100 million “to enhance the properties and reinforce their essential role in the communities they serve,” the announcement noted.
In the same email to ASD, the investor group says it is committed to maintaining A&B's properties "at high standards of quality for tenants and community members," but did not elaborate what that $100 million investment might entail.
When asked about what this means for existing commercial tenants, A&B says that the transaction has no impact on its day-to-day operations or how it works with tenants.
"Following the close of the transaction, we expect to continue operating largely as we do today, with the benefit of being supported by the deep real estate expertise and experience of our new ownership group," A&B noted.
A&B got its start more than 150 years ago, when childhood friends Samuel Alexander and Henry Baldwin established a sugar-growing partnership on Maui in 1870. The company was one of the “Big Five” companies that dominated Hawai‘i’s political and economic landscape in the late 19th and early 20th centuries. You can find more of the company’s history here.
In recent years, though, the company pivoted its focus to Hawai‘i commercial real estate.
In November 2023, A&B sold Grace Pacific, one of the state’s largest asphalt paving contractors, materials and construction companies, to locally owned construction company Nan, Inc.
A&B had acquired the company in 2013 and its sale marked the “culmination of A&B’s simplification strategy, allowing us to sharpen our focus on our core business a s the preeminent commercial real estate company in Hawai‘i,” Parker said in a statement at the time of the sale.
More recently, A&B in August broke ground on a project at its Komohana Industrial Park in Kapolei. An announcement at that time noted the project, which replaces an existing 16,000-square-foot building on 5.7 acres, includes the construction of two Class A industrial buildings totaling some 121,000 square feet of gross leasable area.
As for the investor group, MW Group, Ltd. has led the acquisition, development and management of a $1 billion-plus portfolio that includes retail, industrial, office, self-storage facilities and senior assisted living facilities.
Blackstone, meanwhile, is the largest owner of commercial real estate globally. Its current Hawai‘i hospitality holdings include the Grand Wailea; The Ritz-Carlton Maui, Kapalua; and King Kamehameha's Kona Beach Hotel. The company also owns rental housing on O‘ahu, including The Element near the University of Hawai‘i — West O‘ahu and Kapolei Lofts.
DivcoWest is a real estate investment firm headquartered in San Francisco that, along with its predecessor, has, since its inception in 1993, acquired about 61 million square feet of commercial space, largely throughout the U.S.
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Stephanie Salmons can be reached at stephanie@alohastatedaily.com.
