An insurance company seized by Washington state regulators hopes to sell one of its largest real-estate assets, about 2,700 acres of Dillingham Ranch on O'ahu's North Shore.

The Office of the Insurance Commissioner in Washington state has retained Hawai'i real-estate firm Grubb & Ellis/CBI to market the ranch property, which includes the former home of local business tycoon Walter F. Dillingham and a 400-head cattle operation.

Also on the land in Mokule'ia mauka of Farrington Highway are an equestrian center, horse boarding facility and a coconut grove.

Grubb & Ellis/CBI is offering the property, which is zoned for agriculture and preservation, as a historic site allowing ranch lots as small as two acres.

No asking price is listed, though some estimates put a possible sale price as high as $50 million.

The land is one of the largest real-estate assets of Washington-based Western United Life Assurance Co., a firm insurance regulators seized in March 2004 after Western United's parent company, Metropolitan Mortgage & Securities Co., filed for bankruptcy.

Bill Ripple, spokesman for the Office of the Insurance Commissioner, said the Hawai'i property is among real-estate holdings in several states that regulators want to sell.

Proceeds would go toward normal operating needs of Western United, which has $1.3 billion in assets, 35,000 policyholders and continues doing business as regulators try to find a new owner for the insurance firm.

Marketing the 2,700-acre Dillingham Ranch follows Metropolitan Mortgage's sale last month of 10 oceanfront lots covering roughly 100 acres in Mokule'ia.

Most of the smaller parcels, which were marketed as potential agricultural estate homes and vacation cabin sites, sold for about $23 million combined. One 18-acre oceanfront parcel housing a polo field was not sold because no one bid above its $16 million asking price.

Grubb & Ellis/CBI said the polo property, which is leased by the Hawai'i Polo Club, may soon be put back up for sale.

The 2,700-acre ranch was established by Dillingham, a development magnate who formed Hawaiian Dredging Construction Co. in 1902 to dredge Honolulu Harbor. He was the son of the Massachusetts-born founder of the Oahu Railway & Land Co., Benjamin Franklin Dillingham.

The Dillingham family, however, hasn't owned the ranch for the past quarter-century. A Milwaukee insurance firm bought the property in 1979. In 1987, Japan-based Sankyo Tsusho Co. bought the ranch for $15 million and pursued resort and golf-course development plans staunchly opposed by the community in the early 1990s.

Metropolitan Mortgage acquired most of the uplands ranch property in 2002 for about $11 million, and later that year transferred it to Western United, according to property records.

Jackson Nakasone, Grubb & Ellis/CBI president and chief executive officer, said the property may appeal to someone seeking a private estate or a developer with the patience to go through the permitting process to develop the property under existing zoning.

"Dillingham Ranch is prime North Shore real estate with spectacular views and enormous potential," he said.

Under agriculture zoning, some parts of the property could be subdivided into two-acre ranch lots that allow a dwelling. Other parts allow minimum five-acre lots with a dwelling.

But because of general opposition to development on the North Shore, Nakasone said, he doubts the property could be up-zoned for more intensive uses.

At one time, Western United envisioned rezoning the land and developing a private club or equestrian-based community.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.