BlackSand Capital closes on acquisition of Waikiki Galleria Tower

Original Article

BlackSand Capital is working on a plan to redevelop the 75,000-square-foot two-story retail space fronting Kalakaua that was most recently occupied by DFS Group’s T Galleria. DFS declined an option late last year to extend its lease on the space it had occupied since 1999.

BlackSand Capital President and CEO B.J. Kobayashi told Pacific Business News that BlackSand is working with Honolulu architecture firm Design Partners on conceptual plans for the project, and has not yet selected a design architect.

Kobayashi said that luxury retail would most likely be the best use of the streetfront space along Kalakaua, which is considered one of top retail streets in the nation behind New York’s Fifth Avenue, Beverly Hills’ Rodeo Drive and San Francisco’s Union Square for both rents and prestige.

The tower is next door to the historic Gump Building, which is owned by LVMH and houses its flagship Louis Vuitton store, and is directly across the street from such luxury brands as Saint Laurent, Tiffany and Hermes at Royal Hawaiian Center. Prior to the Covid-19 pandemic, an entity tied to LVMH also bought two commercial condominiums beneath the Hokulani Waikiki by Hilton Grand Vacations Club.

Kobayashi also said there would be space for other retail concepts on the Royal Hawaiian Avenue side of the building.

“Waikiki Galleria Tower is a significant transaction that represents BlackSand’s confidence in the Waikiki market, Hawaii’s economy, and our belief that Kalakaua is one of the best retail corridors in the country,” he said.

BlackSand also owns the Kaimana Beach Hotel at the other end of Waikiki and the company’s office is located a block away from the Galleria tower in the Waikiki Business Plaza. That building, as well as the Waikiki Shopping Plaza, is also locally owned by members of the Mau family.

Kobayashi noted that his firm is largely owned by local investors, and a large part of the investor base is made up of local retirement funds.

“We believe this investment can create long term jobs in Hawaii, such as construction opportunities, by on site local tenants and management positions, as well as supporting travel and tourism growth for Hawaii’s economy,” he said.

The Galleria tower’s seller, 2222 SPE LLC, an affiliate of Sanno USA Inc., bought the 15-story building from Honolulu-based The Mills Group in December 2011 for $187.15 million.

PBN has reached out to DFS Group.