A retail chain with a focus on Japanese merchandise is now the owner of a Honolulu office tower named after a long-gone airline.
Don Quijote (USA) Co. Ltd., which operates three Don Quijote stores on Oahu, became the new owner of the Pan Am Building at
1600 Kapiolani Blvd. on Monday as part of a transaction arranged two years ago.
The retailer bought the tower from Honolulu-based
Pacific Office Properties Trust Inc. for $78.5 million.
Don Quijote has not publicly shared its strategy behind the acquisition. The company is part of a chain based in Japan that operates more than 300 stores, including some in tall buildings. The parent company also has subsidiaries involved in real estate development, commercial property investment and leasing.
A company official in Honolulu who would not give his name said there are no plans at this time to do anything different with the Pan Am Building.
The building is on an adjacent block just makai of Don Quijote’s flagship Honolulu store. Don Quijote bought the land under that store for $45.5 million in 2007, then sold it to a company in Singapore for $41.2 million in 2016 with the right to lease the land back for 30 years, according to property records.
Don Quijote’s 2016 agreement to buy the Pan Am Building was part of an investment deal that included making a loan to relieve a mounting debt crisis for Pacific Office Properties. Don Quijote loaned Pacific Office $280.5 million, which Pacific Office used to pay off $266 million in loans that were about due. Those loans were secured by the Pan Am Building and two other Honolulu office tower complexes owned by Pacific Office: the Waterfront Plaza and the Davies Pacific Center.
As a result, Pacific Office avoided losing the buildings to lenders. But the company continued to struggle financially and earlier this month was at risk of running out of cash for operations.
Pacific Office used all proceeds from the Pan Am Building sale to prepay a loan, but the company also received $3.5 million on Aug. 7 as a loan from its founder, shareholder and local real estate investor Jay Shidler, according to a filing with the U.S. Securities and Exchange Commission made Monday.
