ALEX
#In terms of, say, NOI.
NOI or GLA.
To recap the progress we've made on our migration from the mainland to Hawaii, when we started the process about 60% of our NOI came from mainland assets and 40% from Hawaii assets.
Those numbers are now 20% from the mainland and 80% from Hawaii.
So we've shifted a significant portion of the portfolio back.
We do have an interest in shifting most or all of it back over time, but as we said from the start, we are going to be patient in doing that and look for the right opportunities.
However, because we are a buyer and seller at the same time, seller on the mainland and a buyer in Hawaii, we can do that really at any point in the cycle.
We're not necessarily looking to wait for cheap opportunities in Hawaii because, of course, at the same time, things are pricier in Hawaii that we also can get better value on the mainland.
Really it's all about what can we create value in, in Hawaii, and we will look for unique repositioning opportunities, other ways that we can create value on a Hawaii asset, and if we find it, we will pursue it.
So we have some things that we're actively looking at right now, but the timing is always hard to predict, it just depends on seller interest in Hawaii, and then once we find an interested seller and secure a deal, then we'll go and look to monetize the mainland asset.
And the just one last data point for you, <UNK>, as far as GLA goes, our GLA is roughly 50/50 split between mainland and Hawaii.
Yes, I'm going to tee it up for <UNK> to walk you through it, but basically what happens on the Waihonua was a joint venture so the revenues ---+ you want to take over, <UNK>.
Yes, so essentially for an investment like Waihonua, in the segment reporting all of that profit is shown as, just as a gain or operating profit, it doesn't show up in revenue, and so that will skew the margin number.
There's no revenue for Waihonua, there's obviously the profit from that appears in operating profit, but there's no revenue in the revenue line for Waihonua.
So the main dollar impact to us, of course, would be for Japanese tourists.
Last year, Japanese tourists in Hawaii spent about ---+ comprised about 16% of total visitor expenditures.
So you can assume some daily drop-off in spending for the Japanese based upon the higher exchange for them.
But let's say their spending declined by 10%, what that would really represent is 10% of 16%.
So that in and of itself, is not all that material.
We have to track a little more carefully what happens ---+ what's happening on the mainland.
I think West Coast visitors were strong spenders to date, but we'll have take a look at the East Coast numbers.
Unfortunately, the numbers have not yet been published for the quarter, but they'll be coming out shortly and we'll get a better insight into how tourism is doing based on that report.
Yes, so I think, first of all, as a general rule we're very pleased with our migration into grocery-anchored retail in Hawaii as our primary asset class that we have been investing in.
Of course, Kaka'ako Commerce Center is an obvious exception to that, and there were other things that made that very attractive.
It's in part of town where there's a lot of industrial supply being eliminated because of redevelopment for residential use.
While that's not an asset that we intend to redevelop for residential, the supply around it is being depleted so it's becoming a more attractive asset.
So that's the story behind that one.
But there are other assets that we are looking at with a view towards redevelopment, and those are both industrial and office assets in the urban core where we see the potential to buy an asset now, generate income from it over the next number of years, and then potentially position it for redevelopment in the current cycle.
So that would be an example where we might look at something that we might not otherwise look at, for example office, but with a view towards redevelopment.
Beyond that, I would say our criteria and what we're looking at in commercial acquisitions in Hawaii, is relatively similar to what it has been and continues to be, probably a little bit more on the retail and industrial side than office or other assets.
Hi, Steve, it's <UNK> <UNK>.
We're continuing to see CAP rates continue at relatively the same levels.
On the retail front we're seeing CAP rates in the sub-five range, and there's been a lot of activity in the past on that, it's been slowing down a little but first quarter, but there's still a lot of interest in retail in Hawaii.
On the office market, you'll see the CAP rates a little bit higher than that in Hawaii.
Some are probably six-plus, probably six to eight range, depending on the asset in the opportunity it presents.
Industrial has been a little bit stronger, again, they were probably sub-six that you've been seeing overall for industrial interest.
Steve, this is <UNK>.
In terms of the additional capital required for those type of projects above and beyond what we've got in our schedule already, it would be relatively modest.
We have ---+ Grace, in the period before we purchased them, had come off a pretty substantial period of heavy capital investments, and that's sort of drawing to a close here, and so they've got new plants in their quarry, a substantial portion of which is in service already, the rest of which will go into service by the end of this year.
So in terms of scaling up, it really would be the rolling stock associated with putting more crews, or boots, on the street.
We feel pretty good about Grace's ability to take advantage of an increased market opportunity, and really without major additional capital investments.
Well we typically talk in terms of returns on projects like this, and so, I think the best guidance I can give you is that we ---+ our return on investment on the project, from the acquisition of the land through construction, was about 20% in line with our expectations.
No, <UNK>, it's really the same-store revenue, or same-store performance, is growing at roughly over 5% year-over-year, and you can contribute most of it to rent growth we're seeing on the retail portfolio.
Yes.
