Innovative gifts of ground leases projected to yield at least $7.2 billion
The College’s heritage in focusing on Asia-Pacific issues has made it a regional center for scholarship and exploration of the geo-political issues of the region
HONOLULU--(BUSINESS WIRE)--The Shidler College of Business at the University of Hawai‘i at Manoa announced that alumnus Jay H. Shidler has donated $117 million in cash and real estate ground leases immediately after delivering the final installment of the $111 million gift he announced in 2014. In total, Shidler has given $228 million to the school – which represents the largest individual donation in the University’s 110-year history, and is the second-largest known gift to any U.S. business school at a public university. This latest $117 million donation will further fuel the improvements and expansion facilitated by Shidler’s earlier donations, while providing a level of steady funding that could be used to make the College tuition-free within 40 years, if there is a need or desire to do so at some future time.
The gift is designed as a lasting source of capital for the College and a potential investment model for public educational institutions. Centered upon the donation of land underlying 11 significant office buildings in the commercial business districts of major U.S. cities, this gift of land and attendant ground leases is projected to produce highly certain, management-free cash flow that historically increases faster than inflation.
To ensure the long-term nature of his gift, Shidler has imposed one critical condition – the University is prohibited from selling any of the donated ground leases prior to the end of their 99-year terms. Shidler estimates that the 10 ground leases will generate a minimum of $2.1 billion of contractual cash flow for the College. At the end of the ground lease terms, the College receives full ownership of the related office buildings, which together with the land will be worth an estimated $5.1 billion. In total, this gift of land and commercial buildings will yield a minimum of $7.2 billion during the life of the current leases.
Shidler’s initial gift of $25 million in 2006 prompted the university to name the business school the Shidler College of Business. This was followed by several additional gifts – including $69 million in 2014 – which brought the total to $111 million.
Since that time, the College has been recognized for its international undergraduate business program, placing 16th in U.S. News & World Report’s 2018 rankings. The College’s graduate programs include a Global MBA with focuses on China and Japan, a Vietnam Executive MBA, a Juris Doctor/MBA and a Ph.D. in Business Administration.
Virtually all of the faculty members have international expertise (35 percent are from the Asia-Pacific region), and incorporate a global perspective in their courses and academic activities.
“I credit the guidance of my professors and strong connections with classmates at the College with much of my success in the business world,” said Shidler, a 1968 alumnus (BBA). “With a strong emphasis on international and Asia-Pacific studies, and a rigorous curriculum, I am looking forward to the next generation of University of Hawai‘i alumni contributing greatly to the international community in both a business and personal capacity.”
In 1971, Shidler formed what would become The Shidler Group, which today invests equity and debt capital in U.S. commercial properties and portfolios, and creates and capitalizes new real estate-related companies.
To learn more: http://shidler.hawaii.edu/gift
Russell Pang, 808-543-3591