The Crossing at KBP

‣ Strong industrial demand has created a scarcity in development plots on the geographically constrained Oahu, with high demand by large global-scale users, including Amazon. Oahu’s industrial vacancy rate fell to 0.81% – the lowest in recorded history, which dropped from 1.22% in Q3 2022 and year-over-year down from 1.60% in Q4 2021.

‣ The direct weighted average asking base rent jumped to a record high of $1.48 PSF/Month and are projected to continue to accelerate until more inventory becomes available.

‣ The number of available industrial space listing dropped to a new record low of 57 during Q4 2022.

‣ As such, the local market currently has a lot of unmet demand from small- and medium-sized users, which the developer aims to capitalize on through development of the multi-tenant Property. The Property is the last remaining parcel in the Kapolei Business Park Master Plan.

‣ The Investment will be actively managed by Avalon, a Hawaii-based real estate company founded by principal Christine Camp in 1999. In over 20 years of existence, the company has grown into a vertically integrated platform that develops and manages a portfolio totaling more than $1 billion in total real estate value.

‣ The Sponsor’s entire portfolio is located in Hawaii and contains residential, industrial, and commercial real estate including several other parcels adjacent to the Property.

‣ The purchase price of $48/SF represents a 7.5% discount to comparable sales of other parcels in the Kapolei Business Park West at $52/SF. Scarcity in available development plots on the island has further driven the pricing on other development plots, which require significant infrastructure investments, to well above $50/SF. The development plot benefits from the in-place infrastructure associated with the Kapolei Business Park.

‣ The Sponsor’s all-in basis including soft/hard development costs, a conservative contingency, closing costs, and financing costs is $357/SF. The Sponsor pro forma conservatively projects sale pricing at $440/SF, at the low end of existing sales of older vintage buildings, in order to facilitate pre-sales and an efficient sellout.

‣ The two pre-sale LOI’s received by the Sponsor are for a blended average price of approximately $470/SF.

‣ There are a total of 5 purchase agreements out to buyers for review at this stage.