New Residential Lease-to-Fee Prices Being Released

March 28, 2002

Contributed by CEO Message

In extending these offers to our lessees, Kamehameha Schools takes a major step forward toward improving its overall asset performance consistent with Kamehameha's strategic plan goals. Our offers reflect our fiduciary responsibilities to the trust and our desire to be responsive to our lessees and current market conditions. Our Residential Assets Division (RAD) is taking the lead on this initiative, and RAD Director Sydney Keli'ipule'ole says that within the next two to three weeks, multifamily projects located in windward, east, downtown and central/leeward O'ahu areas will receive updated price information. Virtually all of our remaining 350 single-family lessees and nearly 5,000 multi-family lessees will receive new price information before the end of June. Because of the large number of projects and subdivisions involved, KS will mail letters to lessees and their associations as soon as reasonably possible as relevant materials are prepared. The first batch of letters is going into the mail today. While Kamehameha's overall voluntary sales program has been in place since 1991, this is the first comprehensive price update for most KS residential properties since the mid-1990s. Updated prices reflect several factors, including past sales, appraisal information from three independent appraisal firms, significant property characteristics, sales practices of other lessors and more. In addition to the price information, letters to lessees provide instructions for how they may obtain a sales contract for KS' leased-fee interest in their house or apartment. All sales will be handled through the KS Fee Sales Office. You may be hearing more about Kamehameha's updated leased-fee interest price offerings in the days and weeks ahead, and I encourage you to call our Fee Sales Office if you have any questions or comments in this regard. Hamilton I. McCubbin Chief Executive Officer