A joint venture that includes funds affiliated with Blackstone Real Estate plans to pay cash to buy Alexander & Baldwin, the largest owner of grocery-anchored shopping centers in Hawaii.

The trio of buyers will pay $21.20 per share, or roughly $1.54B, to acquire the REIT at a $2.3B valuation when including outstanding debt.

The REIT will continue to operate as a standalone company following the acquisition, which has been unanimously approved by the board of directors and is expected to close in the next three months, but it will no longer be publicly traded.

Blackstone is teaming up with San Francisco-based DivcoWest and Hawaii-based development and investment firm MW Group to buy Alexander & Baldwin. The purchase price is a roughly 40% premium on the stock’s trading price Monday, before the deal was announced.

Alexander & Baldwin owns 4M SF of commercial space across 21 retail centers, 14 industrial assets and four office properties, along with the fee interests on 146 acres of ground lease assets across Hawaii.

Alexander & Baldwin brought in $14.3M in profit and had a 96% occupancy rate across its portfolio in the third quarter, the REIT reported on Oct. 30. It paid a 22-cent dividend in the third quarter and will boost that to 35 cents in the fourth quarter as part of the sale, according to a press release from Blackstone, which has several investments in the tropical state.

Leaders at Alexander & Baldwin are staying in place, and the buyers plan to spend $100M on upgrades to the existing portfolio.

“We’re excited to reach this agreement, which deepens our commitment to Hawai‘i and our long-standing support for its local businesses,” David Levine, co-head of Americas acquisitions for Blackstone Real Estate, said in a statement.

Blackstone paid $332M for the 450-room Turtle Bay Resort in 2018 and sold it to Host Hotels & Resorts for $725M in 2024. Blackstone also paid $1.1B for the 780-room Grand Wailea in Maui in 2018, and it refinanced the debt on the luxury resort in January.

REITs of all sectors and sizes are pulling in bids from private capital as the debt landscape improves and cash-rich buyers look for assets the public market has mispriced.

“There’s a little bit of a thought that these [discounts] are persisting, and that leads executives at the REITs to reconsider whether it makes sense to be a public company,” Kristen Gannon, co-head of Eastdil Secured’s corporate advisory and merger and acquisitions group, told Bisnow last month.