Ka Wai Ola - Office of Hawaiian Affairs, Volume 38, Number 11, 1 Nowemapa 2021 — LAND ACQUISITION FAQS [ARTICLE]

LAND ACQUISITION FAQS

What prompted the Iwilei acquisition? Why not use those funds to protect legacy lands or put that money into beneficiary programs? How do 0HA's beneficiaries benefit from this acquisition? 0HA takes pride in properly stewarding its real estate portfolio and part of that stewardship is to occasionally scan the market for opportunity. This was a rare opportunity in that it was an adjacent property that already was generating ineome, so 0HA Trustees decided to explore it, analyze it and eventually acquire it. The monies generated by 0HA's commercial real estate holdings fund operations and maintenance of our legacy lands and the added ineome from this property could also be used to fund areas beyond legacy lands as well.

$47 million seems like a high price to pay for property that's expected to generate only about $1 million a year. Are there plans to expand the number of tenants in this space? Will there be any opportunity for Native Hawaiian entrepreneurs or small business owners to take part? Actually, its not a high price. The expected rates of return are average based on the price tag, but in 0HA's case they are well above average because of our use of leverage (debt). 0ur rates of leveraged return on this property are expected to very mueh outperform most other asset classes that 0HA ean choose to invest its money in. 0HA has a huge kuleana and must put its money to work in the best of ways. For our investments that means selecting the best assets based on projected performance. The future possibilities of the property are many, but 0HA is happy with the tenants and ineome it will generate for our people as it is today. For our Native Hawaiian entrepreneurs and business owners we have plans to provide the kinds of opportunity they seek in other 0HA projects on-deck, and we're egually excited for those.

Are there any future land acquisitions on the table for OHA? Perhaps on the neighbor islands? 0nly if it makes sense. To ensure it makes sense, 0HA turns first to its strategic plan and next to its investment policy. Then we would study the investment (whether land or anything else) to understand its individual merits, and its merits from a portfolio perspective.