When acquired by Arroyo, 415 Huntington Boulevard was a vacant, single story garden office building that had previously been owned and occupied by a regional bank and was located in the prestigious Los Angeles bedroom community of San Marino, California. Arroyo recognized immediately that there was a value proposition by updating systems and creating a multi-tenant building catering to local, high-end office users.

The team developed plans for an extensive refurbishment and obtained City of San Marino approval to convert the property to a multi-tenant office building. Capital improvement plans included: exterior façade renovation; new exterior hardscape and landscaping; upgraded electrical system; a new HVAC system; and the development of as-built plans for multiple suites.

Investment Results

As the construction was commencing, an offer to purchase 415 Huntington was received from a local owner/user. Arroyo's hold period was short (less than 18-months), yet it successfully sold the property for 25% more than its purchase price, before commencing the renovation construction and prior to completing any pre-leasing.

Ocean View Center was purchased (together with Haseko Center) in an off-market portfolio acquisition from a major Hawaii institution.  The acquisition team was challenged to design a capital structure to accommodate two cross-collateralized assets, each with multiple ground lease obligations. Arroyo purchased this “edge of CBD” Class B+ asset, recognizing that immediately upon closing, there was inherent value in the below-market purchase price (driven by the acknowledged complexity of the acquisition).

Additionally, the building's rents were 20% below market, but as anticipated, post-closing Arroyo was able to move Ocean View Center rents to Class-A levels while retaining its stabilized occupancy level. Arroyo completed physical and cosmetic improvements to the asset that ultimately led to the property anchoring the sale of the Hawaii Portfolio to a New York-based institutional investor as a part of a larger portfolio sale transaction.

Investment Results
The successful execution of Arroyo’s strategies for the asset yielded equity participants a 65% compounded annual return and a multiple 2.2x return on investment..

Haseko Center| (LH) Office Building

Honolulu, Island of Oahu, Hawaii
Acquired December 2005| Sold August 2007
84,290 SF

Owned in partnership with with REDICO | Acquisition Debt by Greenwich Capital

Airport Center | (LH) Office Building

Honolulu, Island of Oahu, Hawaii
Acquired December 2004 | Sold August 2007
110,983 SF

Owned in partnership with with Blue Vista Capital | Acquisition Debt by Greenwich Capital

Hawaii Agriculture Research Center (HARC) was a value-added lab facility that was transitioning from an owner-user facility to a multi-tenant property.  Having languished on the market for many months  - it was acquired by the Arroyo team from the prior owner/user, through a sponsor joint venture between the Arroyo principals and a Honolulu-based real estate investor.  

The team realized that there was immediate upside value potential from the successful repositioning of the property as a “for lease” lab facility.  Within the first nine months of ownership, new rent benchmarks were established; spaces were categorized and marketed by use; tenant leases were documented, professional on-site property management was instituted; and significant deferred maintenance and new capital improvements were planned, bid and contracted.

Investment Results
HARC was included in Arroyo’s 2007 portfolio sale to provide the buyer with upside potential, augmented by the stabilized nature of the other assets. Including HARC as part of a portfolio dramatically enhanced the marketability of the asset, making it viable to institutional investors. Held for less than one year, HARC provided a return of 250% to its investors.

Hawaii Agricultural Research Center| Lab/Office Building JV

Aiea, Island of Oahu, Hawaii
Acquired October 2006 | Sold September 2007
102,140 SF

Owned in partnership with with Blue Vista Capital | Acquisition Debt by Greenwich Capital​l

Haseko Center was purchased (together with Ocean View Center) in an off-market portfolio acquisition from a major Hawaii institution.  Despite the market’s perception of Haseko Center asa government-occupied Class B asset, the Arroyo team believed there was significant upside potential in the property.  

Arroyo completed over $700,000 in improvements in the first year of ownership, rents increased, and the market’s perception of the property improved dramatically. With a re-branding strategy in place and ready to implement for a new owner, Haseko Center and Ocean View Center proved to be a desirable acquisition target for an institutional investor seeking a stable, institutional caliber asset.

Investment Results
The building was sold (along with Ocean View Center) as part of a portfolio disposition, the assets combined to generate 65% compounded annual return and a multiple of 2.2x return on investment.

Acquired in late 2004, the asset was 90% occupied but still underperforming against the submarket's 5% vacancy rate and its rental rates were also well below market. Arroyo’s strategy to "institutionalize" the asset included: physical improvements to enhance the asset’s visual appeal; key capital improvements to address historic operational issues; employing Tier-1 professional property management and leasing teams; increasing rents to our projected market levels (+ 30%); and, positioning the asset to appeal to institutional investors that Arroyo believed were poised to return to the Islands.  By improving the asset’s visual appeal and operational functionality while enhancing tenant retention and loyalty, the Arroyo team was able to increase rents while maintaining a 90%+ occupancy rate.

Investment  Results
Arroyo successfully repositioned Airport Center as a credible Class B+ asset with solid and dependable cash flows. The property subsequently became a key component of a four-building portfolio sale, and was acquired by an institutional investor seeking to enter the Hawaiian market.
Arroyo’s successfully-executed value-add strategies at Airport Center yielded our partners and investors a 45% compounded annual return and a multiple of 2.6x return on investment.

Prior Transactions | Arroyo Realty Partners:


Mañana Parcel | Mixed-Use Development Project

Pearl City, Island of Oahu, Hawaii
Acquired* April 2007 | Sold October 2014
13 acres

Sponsor/Advisory Role only | *Owned by REDICO in partnership with an institutional equity investor

Ocean View Center| (LH) Office Building

Honolulu, Island of Oahu, Hawaii
Acquired December 2005| Sold August 2007
102,140 SF

Owned in partnership with with REDICO | Acquisition Debt by Greenwich Capital​l

​true generation, LLC | Cadence ​​​​Pacific Advisors, LLC

415 Huntington | Office Building Redevelopment

San Marino, CA
Acquired March 2006 | Sold September 2007
18,038 SF

Owned in partnership with with Blue Vista Capital | Acquisition Debt by Mesa Capital

This 6.6 acre parcel in-fill parcel was acquired from the City and County of Honolulu.  Situated in the dynamic "Mañana" commercial area of Pearl City, in Central Oahu, its zoning designation (IMX-1) permitted a wide range of development options, including office, retail and/or industrial.  Cadence (then Arroyo) Principal Michelle Dowling Schafer acted as one of two advisory sponsor team-members supporting the mainland-based ownership entity (a JV between Michigan-based REDICO and an institutional equity partner.)

​Post closing, the Sponsor team worked closely with a Honolulu-based architectural firm, a major commercial brokerage firm and a seasoned civil engineer to vet and developed several viable development plans for the site, including a 100,000 mixed use center, as well as a BTS office campus for a Federal Agency.  Ultimately the 2008 financial downturn stymied the team's pre-leasing efforts, and in 2009 the site was re-planned for individual condo/building lots to be marketed and sold to owner/users.  Ms. Dowling Schafer remain involved in the property's development efforts through 2010, when she resigned to focus on other business endeavors.

The parcel was ultimately sold in late 2014 to a user and  is poised to finally be developed in 2015.