INDEPENDENT AUDITORS' REPORT


To the Partners of Kaahumanu Center Associates:

We have audited the accompanying balance sheets of Kaahumanu
Center Associates (a Hawaii limited partnership) as of December
31, 1999 and 1998, and the related statements of operations,
changes in partners' capital (deficit) and cash flows for each of
the three years in the period ended December 31, 1999.  These
financial statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Partnership at
December 31, 1999 and 1998, and the results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1999 in conformity with generally accepted
accounting principles.



/S/ DELOITTE & TOUCHE
DELOITTE & TOUCHE LLP

February 9, 2000

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KAAHUMANU CENTER ASSOCIATES

BALANCE SHEETS
DECEMBER 31, 1999 AND 1998

ASSETS
                                            1999             1998
Current Assets
  Cash                                    $ 504,712       $ 404,688
  Accounts receivable - less allowance of
       $107,707  and  $206,402
        for  doubtful  accounts             618,900         558,272
  Prepaid expenses                           64,305          76,084

     Total Current Assets                 1,187,917       1,039,044

Property
  Land and land improvements              6,054,330       6,050,064
  Buildig                                81,879,796      81,529,259
  Furniture, fixtures and equipment       5,128,820       5,047,416
  Construction in process                 1,348,581          60,227

     Total Property                      94,411,527      92,686,966
  Accumulated depreciation               22,134,416      18,826,086

     Net Property                        72,277,111      73,860,880

Other Assets                              1,700,997       2,310,999

Total Assets                            $75,166,025     $77,210,923

LIABILITIES AND PARTNERS' CAPITAL

Current Liabilities
  Current portion of long-term debt      $1,018,643       $ 948,517
  Accounts payable                          690,470         825,831
  Due  to  Maui  Land &
    Pineapple Company,  Inc.              1,153,658         333,290
  Other current liabilities                 105,764          92,312

     Total Current Liabilities            2,968,535       2,199,950

Long-Term Liabilities
  Long-term debt                         60,266,149      61,284,878
  Other long-term liabilities                86,204          80,688

     Total Long-Term Liabilities         60,352,353      61,365,566

Partners' Capital                        11,845,137      13,645,407

Total Liabilities
  and Partners' Capital                 $75,166,025     $77,210,923

See notes to financial statements.

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KAAHUMANU CENTER ASSOCIATES

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997




                                 1999           1998           1997

Revenues
  Rental income - minimum     $7,472,086     $7,235,108     $7,521,860
  Rental income - percentage   1,112,419      1,029,760        874,362
  Other operating income - primarily
     recoveries from tenants   5,921,174      5,359,743      5,548,824

Total Revenues                14,505,679     13,624,611     13,945,046


Costs and Expenses
  Utilities                    2,668,013      2,427,054      2,689,715
  Payroll and related costs    2,087,090      1,976,969      1,938,328
   Depreciation
    and amortization           3,539,544      3,452,639      3,349,654
  Interest                     5,369,013      5,447,733      5,522,235
  Repairs and maintenance        570,175        652,390        545,817
  General excise taxes           566,518        530,313        547,949
  Real property taxes            315,005        314,181        305,842
  Insurance                      366,253        278,605        320,284
  Provision for
   doubtful accounts              57,349        327,914        360,788
  Advertising and promotions     204,328        158,493        148,972
  Management fee                 268,264        258,275        262,380
  Professional fees              143,646        175,971        191,915
  Other expenses                 150,751        103,414         71,305

Total Costs and Expenses      16,305,949     16,103,951     16,255,184

Net Loss                     $(1,800,270)   $(2,479,340)   $(2,310,138)




See notes to financial statements.


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KAAHUMANU CENTER ASSOCIATES

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997



                                             State of
                                               Hawaii
                              Maui Land &    Employees'
                              Pineapple           Retirement
                              Company, Inc.    System            TOTAL


Partners' Capital (Deficit),
  December 31, 1996           $(7,125,504)   $23,900,389    $16,774,885

Cash Calls                        830,000        830,000      1,660,000

Net Loss - 1997                (1,155,069)    (1,155,069)    (2,310,138)

Partners' Capital (Deficit),
  December 31, 1997            (7,450,573)    23,575,320     16,124,747

Net Loss - 1998                (1,239,670)    (1,239,670)    (2,479,340)

Partners' Capital (Deficit),
  December 31, 1998            (8,690,243)    22,335,650     13,645,407

Net Loss - 1999                  (900,135)      (900,135)    (1,800,270)

Partners' Capital (Deficit),
  December 31, 1999           $(9,590,378)   $21,435,515    $11,845,137




See notes to financial statements.


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KAAHUMANU CENTER ASSOCIATES

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

                                 1999           1998           1997
Operating Activities:
  Net Loss                    $(1,800,270)   $(2,479,340)   $(2,310,138)
  Adjustments to reconcile
     net loss to cash provided
     by operating activities:
      Depreciation
       and amortization         3,539,544      3,452,639      3,349,654
      Loss on property disposals   88,074           --               --
     (Increase) decrease in accounts
       receivable                 (60,628)      (239,868)       161,743
     Increase (decrease) in
       accounts payable           609,583        548,765       (337,831)
     Increase in noncurrent
       accounts receivable       (285,546)      (192,282)      (139,743)
     Net change in other operating
       assets and liabilities      30,747         77,282         (9,734)
Net Cash Provided by
     Operating Activities       2,121,504      1,167,196        713,951

Investing Activities:
  Purchases of property        (1,831,275)      (414,746)    (1,344,934)
  (Increase) decrease in
     restricted cash              758,398        (30,641)       144,669
Net Cash Used in
     Investing Activities      (1,072,877)      (445,387)    (1,200,265)

Financing Activities:
  Payments of long-term debt     (948,603)      (870,000)      (797,799)
  Proceeds from cash calls             --             --      1,660,000
Net Cash Provided by (Used in)
     Financing Activities        (948,603)      (870,000)       862,201

Net Increase (Decrease) in Cash   100,024       (148,191)       375,887

Cash, Beginning of Year           404,688        552,879        176,992

Cash, End of Year                $504,712       $404,688       $552,879

See notes to financial statements.


<PAGE>
KAAHUMANU CENTER ASSOCIATES

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

ORGANIZATION

Kaahumanu Center Associates (the Partnership) was formed on June
23, 1993 as a limited partnership between Maui Land & Pineapple
Company, Inc. (ML&P), as general partner, and the Employees'
Retirement System of the State of Hawaii (ERS), as limited
partner. The purpose of the partnership is to finance the
expansion and renovation of and to own and operate the Kaahumanu
Shopping Center (the Center).

The Center is a regional shopping mall located in Kahului, Maui.
Prior to the expansion, the Center consisted of approximately
315,000 square feet of gross leasable area.  The expansion and
renovation which was completed in November 1994, increased the
Center to approximately 573,000 square feet of gross leasable
area.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting - The Partnership's policy is to prepare its
financial statements using the accrual basis of accounting.

Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses
during the reporting periods.  Future actual amounts could differ
from those estimates.

Property - Property which was contributed to the partnership by
ML&P is stated at ML&P's net book value at the date of
contribution; subsequent additions are stated at cost.
Depreciation is computed using the straight-line method.

Advertising and Promotion - The cost of advertising and sales
promotion activities is expensed as incurred.

Income Taxes - The Partnership is not subject to federal and
state income taxes.  The distributive shares of income or loss
and other tax attributes from the Partnership are reportable by
the individual partners.


PARTNERSHIP AGREEMENTS

Capital Contributions - ML&P contributed the land and the
shopping center improvements as they existed prior to the
expansion and renovation project, subject to the existing first
mortgage, together with approximately nine acres of adjacent land
which became part of the expanded shopping center, for a 99%
interest in the Partnership.

ERS originally contributed $312,000 for a one- percent interest
in the Partnership and made a loan of $30.6 million to the
Partnership.  Effective April 30, 1995, after completion of the
expansion and renovation and the satisfaction of certain
conditions, ERS converted its loan to capital for an additional
49% interest and became a 50% partner with ML&P.

In 1997 the Partnership received cash of $1,660,000 from the
partners pursuant to cash calls.

Allocations and Distributions - Profit and loss allocations and
cash distributions of the partnership are based on the ownership
interests of the partners.

ERS and ML&P each have a 9% cumulative, non-compounded priority
right to cash distributions based on their net contributions to
the partnership (preferred return).  The ML&P preferred return is
subordinate to the ERS preferred return.  For the purpose of
calculating the preferred returns, each partner's capital
contribution had an agreed upon value of $30.9 million on April
30, 1995.  The accumulated unpaid preferred returns at December
31, 1999 were $11 million each for ML&P and ERS.

Management and Operations - The Partnership has an Operating
Agreement with ML&P for the operation of the Center.  The
Operating Agreement has an initial term of 15 years, which
commenced when ERS became a 50% partner, with options to renew
for four additional 10-year periods.  It provides for certain
performance tests, which if not met, could result in termination
of the Agreement.  The tests were not met in 1999, but
termination of the Agreement is not presently being considered.

ML&P as managing partner, is responsible for the day-to-day
management of the Partnership's business affairs.  Major
decisions, as defined in the partnership agreement, require the
unanimous approval of the partners.


SUPPLEMENTAL CASH FLOW INFORMATION
1. Purchases of property of $75,000 is included in accounts
   payable at December 31, 1999.

2  Interest paid during 1999, 1998 and 1997 was $5,369,000,
   $5,448,000 and $5,522,000, respectively.


RELATED PARTY TRANSACTIONS

Pursuant to the Partnership Operating Agreement, the Partnership
pays to ML&P an operator's fee equal to 3% of gross revenues, as
defined.  In 1999, 1998 and 1997, ML&P charged the Partnership
$268,000, $258,000 and $262,000, respectively, for management
fees.

The Partnership does not have any employees.  As such, ML&P
provides all on-site and administrative personnel and also incurs
other costs and expenses, primarily insurance, which are
reimbursable by the Partnership.  In 1999, 1998, and 1997 ML&P
charged the Partnership $2,417,000, $2,303,000 and $2,240,000,
respectively, for payroll and other costs and expenses.

ML&P generates a portion of the electricity which is used by the
Center.  In 1999, 1998, and 1997 ML&P charged the Partnership
$2,263,000, $2,144,000 and $2,312,000, respectively, for
electricity.

Amounts due to ML&P for management fees, electricity and
reimbursable costs were
$1,154,000 and $333,000 as of December 31, 1999 and 1998,
respectively.

OTHER ASSETS

Other  Assets  at  December  31, 1999  and  1998  consisted  of  the
following:

                                 1999                1998

Deferred costs                $  719,171          $  856,321
Restricted cash                       --             758,398
Noncurrent accounts receivable   981,826             696,280

     Total Other Assets       $1,700,997          $2,310,999

Deferred costs are primarily leasing consultation costs and are
net of amortization of $845,000 and $721,000, respectively, at
December 31, 1999 and 1998.  Restricted cash represents proceeds
from the mortgage loan which are reserved for additional
expansion costs, as well as a percentage of revenues retained for
capital improvements as set forth in the Partnership Operating
Agreement.  The balance at December 31, 1998 was expended for
property additions in 1999.  The Partners agreed to waive the
required reserve for the year ended December 31, 1999.

Noncurrent accounts receivable represents the excess of minimum
rental income recognized on a straight-line basis over amounts
receivable according to the provisions of the lease, after
deducting an estimated amount for amounts not recoverable.


BORROWING ARRANGEMENTS

The Partnership has a mortgage loan which bears interest at 8.57%
and is payable in monthly installments of $526,000, including
interest, through 2005 when the entire balance is payable.  The
loan is collateralized by the Center and is nonrecourse except
for the first $10 million which is guaranteed by ML&P until the
Center attains a defined level of net operating income.

Scheduled principal maturities for the next five years from 2000
through 2004 are as follows: $1,019,000, $1,126,000, $1,228,000,
$1,338,000 and $1,459,000.


LEASES

Tenant leases of the Center provide for monthly base rent plus
percentage rents and reimbursement for common area maintenance
and other costs.  Future minimum rental income to be received
under non-cancelable operating leases aggregates $50,347,000 and
is receivable during the next five years (2000 through 2004) as
follows: $6,532,000, $6,498,000, $6,165,000, $5,337,000,
$4,597,000, respectively, and $21,218,000 thereafter.


CONCENTRATION OF CREDIT RISK

The  Partnership extends credit to its tenants in the  course  of
its  leasing  operations.  The creditworthiness of  existing  and
potential tenants is evaluated and under certain circumstances  a
security deposit is required.

                        *   *   *   *   *