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James Campbell Company LLC
2 0 1 5 ANNUAL REPORT
James Campbell
Company LLC
KAPOLEI, HAWAI‘I
1001 Kamokila Boulevard
James Campbell Building
Suite 200
Kapolei, Hawai‘i 96707-2014
Tel (808) 674-6674
Fax (808) 674-3111
SAN FRANCISCO, CALIFORNIA
425 California Street
Suite 500
San Francisco,
California 94104-2112
Tel (415) 397-4000
Fax (415) 291-5720
Or visit our websites at
www.jamescampbell.com
www.kapolei.com
Company Directory
James Campbell Company LLC
2 0 1 5 ANNUAL RE PORT
Board of Directors
Legal Counsel
Executive Officers
Richard J. Dahl
Munger, Tolles & Olson LLP
Richard J. Dahl
Chairman & Chief Executive Officer
James Campbell Company LLC
Los Angeles, CA
President & Chief Executive Officer
Linda Assante
Auditors
Managing Partner
Jasper Ridge Partners
KPMG LLP
Honolulu, HI
W. David P. Carey, III
President & Chief Executive Officer
Outrigger Enterprises Group
Shareholder Relations
Kristin F. Gannon
D. Keola Lloyd
Managing Partner
Eastdil Secured
Marie Oh Huber
Vice President
Shareholder Relations/Secretary
Phone: (808) 674-3167
Email: [email protected]
Senior Vice President,
General Counsel & Secretary
eBay, Inc.
Headquarters
Stephen H. MacMillan
James Campbell Company LLC
Chairman & Chief Executive Officer
James Campbell Company LLC
(retired)
T. Michael May
1001 Kamokila Boulevard
James Campbell Building, Suite 200
Kapolei, HI 96707-2014
Phone: (808) 674-6674
www.jamescampbell.com
President & Chief Executive Officer
Hawaiian Electric Company
(retired)
CHAIRM AN’S M E S S AGE
Landon H.W. Chun
Executive Vice President
Chief Financial Officer
Dorine Holsey Streeter
Executive Vice President
Real Estate Investment Management
Timothy J. Brauer
I
n 2015, while the national economy continued to see modest growth, the
commercial real estate sector experienced robust expansion overall.
This was reflected in the solid performance of the James Campbell Company,
Executive Vice President
Real Estate Investments
which exceeded national sector benchmarks. I am pleased to report that this
Bradford J. Myers
Estate Investment Management Division, which manages the Company’s
President
Kapolei Properties Division
was due to the strong results posted by our two operating divisions: the Real
investment assets in 15 states and Washington, D.C., and Kapolei Properties Division, which directs the
development of Kapolei. We highlight the results in this report.
As we move into 2016, we are focused on navigating a volatile national and global economy with the same timetested management practices that have sustained us over the years.
I would like to thank our team at James Campbell Company as well as our Board of Directors for all their
contributions in 2015, and express my gratitude to our Shareholders for their continued input and support.
Richard J. Dahl
Chairman & Chief Executive Officer
(Cover photo)
Kapolei Lofts, a 499-apartment rental complex,
opened in August 2015.
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675 CANTON STREET
675 Canton Street, Norwood, Massachusetts
REAL ESTATE INVESTMENT MANAGEMENT
A
s 2015 came to a close, the U.S. economy continued to exhibit healthy signs of growth with a lower
unemployment rate, strong job growth and increased consumer spending. In the commercial real estate
market, demand for commercial leases was up, and vacancies continued a downward trend due to the shortage
of inventory in spite of construction growth across all property types. It appears the market is in a period of strong
fundamentals, even with the specter of a lackluster global economy going into 2016.
The Real Estate Investment Management (REIM) division manages the Company’s income-producing real
estate assets in 15 states including Hawai‘i, and Washington, D.C. In 2015, REIM capitalized on the trends in
the national market, posting the highest occupancy rates since the downturn, and good rental growth in most
markets. This was especially true in the industrial market. During the year, the division bolstered its holdings with
the acquisition of four industrial properties. It also disposed of four assets, including a vacant pad site, ground
lease, retail redevelopment and office property.
675 Canton Street, Norwood, Massachusetts
recent development of mixed-use, residential and
This 338,432-square-foot warehouse facility
office projects in the market make 675 Canton Street
represented a rare opportunity to acquire a Class A
extremely attractive to industrial tenants. The property
property in the Route 128 South submarket, one of
has superior access to major transportation arteries
Boston’s most supply constrained industrial markets.
throughout greater Boston.
The combination of limited warehouse facilities and
675 Canton Street is 100 percent leased to a
diverse mix of tenants including Universal Wilde,
which provides tools and services for direct marketing
campaigns; CHEP USA, which manages the movement
of more than 300 million pallets and containers for
use in the automotive, consumer goods, food and
beverage, home improvement, petrochemical, and raw
materials industries; New England Portable Storage, a
moving and storage company using PODS (Portable
On-Demand Storage) containers; and CaesarStone,
Industrial properties expand portfolio
The Company’s four new properties are located in highly desirable industrial markets.
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which manufactures and sells engineered quartz
surfaces for both residential and non-residential
applications.
3
easy access to transportation routes and a quality
labor force.
There are six Luterbach tenants. They include
Christopher Morgan and BindMax Proteins, two
separate companies on one lease. Christopher Morgan
Luterbach Companies Portfolio,
performs fulfillment and distribution services for
Milwaukee, Wisconsin
infomercial products, while BindMax Proteins is a
The acquisition of the Luterbach Companies Portfolio
supplier of food ingredients. EMTEQ, a subsidiary of
of three high-quality Class A industrial properties in
B/E Aerospace, produces and supplies products for the
Milwaukee, Wisconsin marks the Company’s re-entry
aviation industry. KirbyBuilt Products manufactures
into the Milwaukee Industrial market where it last
recycled plastic and site furniture. Caliendo-Savio
owned properties in the late 1990s.
Enterprises is a brand merchandising agency
The three buildings, totaling 408,852 square
specializing in online fulfillment of various promotional
feet, are relatively new, and come with the added
merchandising products. Komacki & Associates is an
Powers Pointe, Chanhassen, Minnesota
Molding does custom injections molding and product
bonus of 2.27 acres of developable land on the south-
electrical engineering company.
This acquisition was an unusually good deal as it came
manufacturing. For example, it produces lip balm that
west corner of the property. They are located in the
In addition to diversifying the Company’s
directly to the Company from the developer, United
Federal Package uses to fill lip balm tubes. The close
Southeast Waukesha County submarket, which has
portfolio, Milwaukee brings the stability of a third tier
Properties, an investment and development company
proximity of their plants allows for quick delivery of
an industrial base of 17 million square feet. It also has
market that yields higher returns.
based in Minneapolis. It was an opportunity to acquire
product between the two facilities.
Powers Pointe, a brand new, 140,323-square-foot
building that United Properties was building in the
Southeast Waukesha County
Chanhassen industrial/office park area, which is part
of the Southwest Industrial submarket in the Twin
< North
5400 SOUTH WESTRIDGE DRIVE
Cities. The off-market offer was made because of the
developer’s 25-year relationship with the Campbell
5333-5349 SOUTH EMMER DRIVE
Company as the management company for its more
than one-million-square-foot Minneapolis portfolio.
16555-16605 WEST STRATTON DRIVE
The deal was even more attractive, as two
tenants were ready to sign 10-year leases for the
South Moorland Road
entire building as soon as it was completed. The
property was fully leased when the Company acquired
oad
oit R
t Bel
Wes
West Str
atton Dri
ve
it in August 2015.
Despite having similar names, the tenants,
Federal Package Network Inc. and Federal Molding
Corp., are separate companies. However, they have a
Emm
er D
r
close business relationship that required co-location.
ive
Federal Package specializes in manufacturing small
containers for health, beauty and cosmetics products,
which they also fill and package for retailing. Federal
4
5
KAPOLEI PROPERTIES DIVISION
I
n 2015, the Hawai‘i economy experienced positive growth, reflecting national trends. In particular, the visitor
industry was strong, job growth was up, unemployment was down, and personal income increased. In spite
of a nervous global economy, experts are projecting continued expansion in 2016. In Kapolei, growth has
generally been more stable than other areas in Hawai‘i across economic cycles.
One particularly robust sector was Hawai‘i’s real estate market, with U.S. and foreign investors snapping
up properties for development. Meanwhile, construction on O‘ahu continued at a brisk pace into the new year.
Kapolei was experiencing its own growth in the development of the City of Kapolei where investor activity grew.
The Kapolei Properties Division (KPD), which oversees the Company’s Kapolei area development and investment
activities, made major investments in two noteworthy housing and infrastructure projects.
Kapolei Lofts
Winzer Distribution Facility, Plano, Texas
The 122,595-square-foot industrial property is 100
The complex was constructed in 2013 as a
For the first time in nearly 40 years, O‘ahu saw the
a 499-apartment rental complex that sits on 17 acres
percent leased to Winzer Corporation for its head-
build-to-suit for Winzer, and is located in the
construction and opening in late August 2015 of the
at the corner of Kapolei Parkway and Wakea Street in
quarters and distribution facility at 4060 East Plano
prestigious Research/Technology district of Plano in a
first significant rental housing complex on the island.
the urban core of the City of Kapolei.
Parkway, Plano, Texas. The company is a leading supplier
submarket that caters to the technology industry. This
Kapolei Lofts, a development by Forest City Hawai’i, is
for automotive and industrial maintenance repair supplies
asset complements the Company’s Dallas-Forth Worth
to over 35,000 customers in a variety of markets.
industrial portfolio.
Strategic Dispositions
In 2015, the Company disposed of four assets in California, New Jersey and Kansas. The dispositions were
opportunities to harvest value or exit non-strategic investment markets.
■
Block C at Puente Hills East, City of Industry,
■
California. It includes a redeveloped retail center
Wichita West, Wichita, Kansas. The ground
lease was sold to existing tenant, Lowe’s.
leased to Ross, Old Navy, Petsmart, and Ulta
Cosmetics, and ground leases. The center was
sold to a private investor.
■
2200 Fletcher Avenue, Fort Lee, New Jersey.
The office complex is under contract for disposal
with JFR Global. Closing is expected in early 2016.
■
Block A at Puente Hills East, City of Industry,
California. A vacant pad was sold to Tommy’s
Original World Famous Hamburgers.
6
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The project responds to a pent-up demand
for rental housing in a fast growing community, as
borne out by the strong response by tenants who are
mainly empty nesters, young professionals and singles.
Most attractive to these renters is Kapolei Lofts’ central
location and its close proximity to numerous shopping,
retail and community facilities. There is the added
appeal of the very attractive apartments, which are
contemporary in design with central air-conditioning,
nine-foot ceilings, walk-in closets, lanais spacious
enough for outdoor dining, energy efficient technology
and appliances, and photovoltaic systems. Residents are
also enthusiastic about the “resort style” amenities
including a community center with a swimming pool,
barbecue area, a 2,000-square-foot fitness facility, a cyber
café with wifi, and large private room for meetings
and private parties, a great room with large-screen TV,
and a popular self-service doggie spa for pet owners.
To address the economic viability of the project,
Forest City designed it to be sustainable by reducing
maintenance and utility costs significantly — i.e.,
building tighter, better insulated apartments and
facilities, installing a photo-voltaic system to generate
power for the common areas, and installing demand
response smart controllers to help mitigate the
demand for hot water usage by residents.
At full build out, the complex will have 14
residential buildings. Of the 499 residential units, 300
are affordable. The complex will have generous open
space and a highly landscaped park for residents.
Of particular note is the project’s financing.
The $140-million project was financed via a publicprivate partnership, including a significant role by KPD
through an agreement that allows Forest City to use the
land’s value towards project financing. KPD also
provided funding for project improvements. Other
project partners include several financial institutions, the
State of Hawai‘i and the City and County of Honolulu.
8
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Kalaeloa Boulevard Improvement
In 2015, KPD began $50 million in infrastructure
improvements on the heavily traveled Kalaeloa
Boulevard, an aging roadway from Lauwiliwili Street
to Malakole Street in the City of Kapolei. The roadway
improvement includes widening and reconstructing
the roadway that was last improved in the early
1990s. It also includes a new Kalaeloa Wastewater
Pump Station and sewer system to accommodate the
area’s projected industrial sector growth.
The boulevard is the main connector to some
of the area’s busiest employment centers — James
Campbell Industrial Park, the Kapolei Business Park,
and Kalaeloa Harbor, the state’s second business
commercial port.
When completed in 2018, the project will be
dedicated to the City and County of Honolulu, which
is assisting with project approvals.
Kama’aha Avenue
In another infrastructure project designed to
accommodate growth in the city’s core, KPD partnered
with the City and County of Honolulu and developer
D.R. Horton to extend Kama’aha Avenue through to
Uluohia Street and Kapolei Parkway and into Mehana,
the 135-acre mixed-use residential community nearing
completion. The roadway, which was opened in
December 2015, gives drivers a second way into
Mehana and relieves traffic build up in front of the new
Ho‘okele Elementary School on Kunehi Street. KPD’s
share of this extension project was approximately
$6.5 million.
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Kids learn that Reading is FUNdamental.
Education, culture
and wellbeing
SUPPORTING OUR COMMUNITY
n 2015, the James & Abigail Campbell Family Foundation and the James Campbell Company continued their
I
Nearly 48 percent, or almost $681,000 went to
long tradition of supporting children, their families and communities in West O‘ahu through their community
education, with the lion’s share supporting ten public
giving programs. Together they contributed more than $1.4 million to organizations and non-profits that serve
schools in Leeward O‘ahu. The remainder went to a
these beneficiaries.
range of educational programs that promote learning
in both traditional and non-traditional ways — from
reading (Reading is FUNdamental) to robotics (VEX
Robotics at Wai‘anae Intermediate). Culture and arts
programs were also recipients, including the performing
arts (Hawaii Opera Theatre) and Hawaiian cultural
practices, particularly the Polynesian Voyaging Society’s
Worldwide Voyage promoting the importance of
caring for the ‘aina. A substantial share was dedicated
Pictured from left to right: Jon Henry Lee, Campbell High School principal; Disa Hauge, Wai’anae High School principal; Cosmo
Arakawa, Kapolei Elementary vice principal; Ann Mahi, Nanakuli/Wai’anae Complex Area superintendent; Darin Pilialoha, Nanakuli
High and Intermediate principal; Heidi Armstrong, Campbell/Kapolei Complex Area superintendent; Shelley Ferrara, Mauka Lani
Elementary principal; Elden Esmerelda, Kapolei High School principal; Bruce Naguwa, Kapolei Middle School principal; Laureen
Dunn, Ho’okele Elementary principal; Brant Ebisiya, Barbers Point Elementary vice principal; Todd Fujimori, Makakilo Elementary
principal; and Tim Brauer, James Campbell Company executive vice president.
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Ho- ku- le‘a image ® Polynesian Voyaging Society.
Photo © ‘O iwi TV • Photographer: Kaipo Ki-‘aha
to expanding healthcare services for West O‘ahu and
Leeward communities, with support for the Queen’s
Medical Center – West O‘ahu and the Wai‘anae Coast
Comprehensive Health Center. The Company also
continued to encourage employee volunteerism with
its support for their preferred charities.
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Properties
as of December 31, 2015
Minneapolis
Boston
Milwaukee
New Jersey
Chicago
Washington, D.C.
area
Salt Lake City
Kansas City
San Francisco
Raleigh-Durham
Los Angeles
Atlanta
Phoenix
Dallas
Kapolei
Lahaina
Arizona
■ Millennium McCormick Ranch
California
▲
▲
▲
▲
▲
▲
▲
▲
▲
■
●
1200 Whipple Road
5725 Jurupa Street
13479 Valley Boulevard
18021 Valley View Avenue
33300 Dowe Avenue
Fullerton Industrial Center
Montebello Industrial Center
Ontario Distribution Center
Ontario Gateway West
Puente Hills East
Vintage Oaks Shopping Center
Georgia
▲ 675 Old Peachtree Road
◆ 3225 Cumberland Boulevard
▲ Atlanta Airport
▲
▲
▲
▲
Distribution Center
Breckinridge North
Shawnee Ridge
SouthPoint
Suwanee Creek
Distribution Center
Hawai‘i
◆
▲
■
■
●
■
■
▲
■
■
■
Campbell Square
Cardinal Health
Kam IV Road
Kapolei Harborside
Kapolei Shopping Center
Lanikuhonua
Makaiwa Hills
Neiman Marcus
Paradise Cove
Kapolei
Westin Maui
Illinois
◆
▲
▲
▲
◆
▲
▲
◆
▲
▲
▲
600 North Field Drive
815 Bluff Road
825 Bluff Road
1333–1347 Mt. Prospect Road
3025 Highland Parkway
8710–8740 W. 50th Street
10600 W. Belmont Avenue
ArborLake Centre
Hamilton Parkway
Roselle Center
Windham Industrial Center
Maryland
◆ Two Washingtonian
Massachusetts
◆
◆
▲
▲
▲
◆
14
101 Station Landing
160 Gould Street
250 Revolutionary Drive
350 Revolutionary Drive
675 Canton Street
One Alewife Center
Minnesota
▲
▲
▲
▲
◆
▲
▲
▲
865 Xenium Lane North
1090 Gemini Road
8100 Powers Boulevard
8701 Brooklyn Boulevard
12700 Whitewater Drive
Carlson Tech Center
Oliver Avenue South
Plymouth Industrial
Missouri
◆ Ward Parkway
Utah
◆ Union Park Center II
◆ Union Park Center III
◆ Union Park Center IV
Virginia
◆ 2051 Jamieson Avenue
◆ 3110 Fairview Park Drive
◆ 4100 North Fairfax Drive
Washington, D.C.
◆ 1331 F Street NW
◆ 1667 K Street NW
New Jersey
▲
◆
▲
▲
24 Engelhard Drive
2200 Fletcher Avenue
2615 Route 130
One Matrix Drive
Wisconsin
▲ Emmer Drive
▲ Stratton Drive
▲ Westridge Drive
North Carolina
◆ Central Park South
◆ Central Park West
Texas
▲ 4060 E. Plano Parkway
▲ 4600 South Watson
▲ DFW Warehouse Portfolio:
801 Railhead Road
4675 Railhead Road
3201 E. Arkansas Lane
3221 E. Arkansas Lane
4800 Langdon Road
4900 Langdon Road
Legend
▲ Industrial
■ Land/Ground Lease
◆ Office
● Retail