A&B purchases
Phoenix building
for $14.9 million

It is the firm's first
acquisition in the area

Star-Bulletin staff

Alexander & Baldwin Inc. is going into Phoenix for the first time with the purchase of a new office building for $14.9 million.

The company said yesterday that the purchase is part of a plan to find investments in high-growth areas across the nation. The 120,778-square-foot Southbank II building is on a 10.5 acre parcel within the Southbank Business Park near downtown Phoenix. The one-story building was built by the Ryan Cos. in 1997 and is now fully occupied.

Honolulu-based A&B and its subsidiaries, A&B Properties Inc. and WDCI Inc., purchased the building from Ryan as part of an IRS Section 1031 exchange that allows the company to defer capital gains taxes. The Internal Revenue Service rule allows the tax deferral because the real estate investment remains intact as new properties are bought to replace properties that were sold.

To complete the Phoenix purchase as part of the 1031 exchange, the company used the proceeds from the $51.5 million June sale of a three-building office building in Cupertino, Calif., the sale of land under the Maui Marketplace near Kahului, and two of nine warehouse buildings in the Dallas/Fort Worth area.

"A&B is continuing its real estate investment program which seeks acquisition opportunities in expanding, midsize metropolitan areas," said Chief Executive W. Allen Doane.

The company recently purchased two commercial properties each in Sacramento, Calif., and San Antonio, Texas, and now has 3.31 million square feet of commercial space in Texas, Arizona, Washington, California and Colorado.