Pacific Office turns profit on Pan Am sale

Pacific Office Properties Trust Inc. ended a string of 24 consecutive quarterly losses by carving out an $8.4 million profit in the July-September period following its sale of the Pan Am Building.

The Honolulu-based firm, which reported its financial results Friday in a Securities and Exchange Commission filing, closed the transaction Aug. 13 when it sold the property at 1600 Kapiolani Blvd. to Don Quijote (USA) Co. for $78.5 million.

Pacific Office now owns just two properties — Waterfront Plaza and Davies Pacific Center in Honolulu — as well as a 5 percent stake in an Arizona property.

Pacific Office, which has been selling properties amid mounting losses, lost $3.8 million in the year- earlier quarter. Since inception in 2008, Pacific Office’s cumulative net loss was $256.3 million through September.

The company’s revenue, which primarily comes from rent, tenant reimbursements and parking, declined 3.1 percent to $9 million from $9.3 million in the year-earlier quarter.

Local real estate investor Jay Shidler formed Pacific Office a decade ago by contributing several buildings he owned and offering stock in the firm to the public.

The company at one point owned 24 properties and had aspirations of using investor capital to grow. Instead, Pacific Office struggled amid the U.S. economic recession shortly after the company’s formation and ended up selling or losing properties to foreclosure in an effort to stay solvent.

Pacific Office said in its SEC filing that it had the equivalent of $1.7 million in unrestricted cash available Sept. 30 and that it anticipated not having enough cash flow from operations and cash on hand to sustain business beyond the end of this year. The company has given similar warnings in previous quarters.

To sustain operations, Pacific Office said it is considering actions that include selling or merging the company, raising capital or dissolving.

Pacific Office’s shares did not trade Friday and closed most recently at 6 cents Tuesday. The stock started trading at about $6.60 in 2008.

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