The state Office of Hawaiian Affairs has bought a historic Iwilei office complex as part of an investment strategy and a plan to move out of office space the agency rents for close to $1 million a year.

OHA purchased Gentry Pacific Design Center, a 185,787-square-foot building on about 4 acres at 560 N. Nimitz Highway, between City Mill and Kmart.

The sale closed Monday for about $21 million, according to property records.

The seller was an affiliate of local real estate development firm Gentry-Pacific Ltd.

Tenants at the Design Center won’t be affected by the sale under terms of their leases. OHA said it plans to move its offices to the Design Center as space becomes available, though the agency has no timetable for moving.

Kamana‘opono Crabbe, OHA’s chief executive officer, said the purchase was made in part to diversify the agency’s almost

$400 million investment portfolio, which has no major income-producing real estate. The deal also could save OHA money on its office space needs over the long term.

OHA, which has close to 150 employees, leases about 30,000 square feet of office space in Pacific Park Plaza at 711 Kapiolani Blvd. Annual rent is about $1 million.

“The acquisition represents another meaningful step forward in our strategy of creating new opportunities to improve conditions for all Native Hawaiians,” Crabbe said in a statement.

“This acquisition will be a positive addition to OHA’s portfolio as we diversify our investments.”

OHA has been interested in commercial real estate for many years with an eye toward becoming a landlord with rental income and owning its own headquarters.

The agency considered buying the historic downtown post office and federal building in 2002. The idea for that building was to provide space for state offices, OHA and a range of private groups that assist Hawaiians — and creating a seat for a potential future independent Native Hawaiian government. But OHA passed on the opportunity over concerns about expensive renovations and disabled access improvements required for the building.

In 2005, OHA proposed developing a $32 million headquarters and cultural center on 5 acres near the Ewa edge of Kakaako Waterfront Park. But efforts to lease the land from another state agency, the Hawaii Community Development Authority, hit snags.

Then earlier this year, the state Legislature conveyed about 30 acres of mostly undeveloped real estate in Kakaako makai of Ala Moana Boulevard in a

$200 million settlement for OHA claims on delinquent ceded-land payments that represent its share of state revenue generated on land once owned by the Hawaiian monarchy.

Leases on the Kakaako property, which include office space leased to the state Department of Accounting and General Services, generate about $1 million in annual revenue.

OHA is formulating a long-term master plan for how to use and develop the Kakaako land with a mix of cultural resources, a new headquarters and possibly high-rise development that would bolster OHA revenue spent on programs benefiting Hawaiians. But such development could take many years.

The Design Center is leased largely to a concentration of businesses in home design, furnishing, renovation and construction, plus a handful of companies outside the residential real estate industry. The building also houses the headquarters of Gentry Pacific, one of Hawaii’s largest homebuilders.

The three-story building was constructed in the 1930s and was originally a manufacturing plant for American Can Co., which made cans for nearby pineapple canneries. American Can shut down its factory in the early 1970s, and Gentry bought the property in 1985 for about $8 million and spent another $3 million on renovations, according to Gentry Pacific.