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Oahu Industrial Market Report Q2 2019

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Colliers Hawaii Industrial Market Report

Virtually No Change To Tight Market Conditions

Key Takeaways

  • 2019 started off with a first quarter occupancy gain of 44,404 square feet, only to see it erased in the second quarter. In the second quarter, the Oahu industrial market posted a net absorption loss of more than 50,000 square feet, resulting in a year-to-date loss of 5,936 square feet.
  • Vacancy rates rose from 1.92% in the first quarter to 2.04% in the second quarter.
  • Of the four major industrial job categories, the natural resources, mining and construction category (principally comprised of construction jobs) generated the majority of new jobs for the past year. This category gained 1,400 new positions compensating for the loss of 700 transportation, warehousing and utilizes jobs and 300 manufacturing jobs that occurred.
  • Along with construction job growth, the industrial sector as a whole appears to be strengthening. As of April 2019, nearly $700 million in building permits have been registered for the first four months of the year, a healthy jump of 31.2% over the $525.51 million recorded for April YTD 2018.
  • Of the 54 acres that were available for sale at Kapolei Business Park II, only 8.36 acres remain. For Kapolei Business Park West, which began with 54.13 acres in late 2018, roughly 11 acres have either sold or are in escrow, and about 22 acres are under active negotiations.
  • The outlook for Oahu’s industrial market remains virtually unchanged as vacancy rates are projected to fall below 2.0%. The surge in industrial land acquisition in West Oahu is a positive sign that developers and owner-users are planning on building new facilities in the near term future.

Summary Statistics

2Q2019 Industrial Market

 YTD Net Absorption:  (5,936) SF
 Vacancy Rate:  2.04%
 Direct Wtd. Avg. Asking Rent:  $1.23 PSF/Mo.
 Avg. Operating Exp.:  $0.41 PSF/Mo.

Oahu Industrial Market Report Q2 2019

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Related Experts

Mike Hamasu

Research & Consulting Director

Hawaii - Honolulu

Michael brings to Colliers over 25 years of marketing and marketing research experience. Michael has directed research efforts at commercial brokerages with a focus on providing information to assist in strategic decision making for real estate investors and brokerage clientele. This effort reported on nearly 600 million square feet of commercial/industrial properties in the San Francisco Bay Area.

Having been quoted in the Wall Street Journal, USA Today, Real Estate Forum and Commercial Property News as well as other regional publications, Michael has been recognized for his detailed analysis of the commercial real estate marketplace and has  become the recognized source for commercial real estate trend analysis and forecasts for Hawaii’s marketplace.

In addition to managing the primary and secondary research efforts in the collection of commercial office, retail and industrial market information and statistics, Michael established the company’s real estate consulting division. Utilizing market factors such as: vacancy rates, absorption, net effective rents, and sales comparables, this consulting unit is able to advise developers, investors, property owners, and tenants on current and projected market trends.

Whitney Cressman Limited — Commercial Real Estate Marketing Research Director
Directed brokerage, internal research efforts, and generated real estate consulting assignments at a busy boutique firm in San Francisco Bay area. Served as the principal liaison to press and media. Analyzed office, retail, and development site criteria for market demand and feasibility.

Cushman & Wakefield — Commercial Real Estate Research Services Manager
Oversaw the compilation of market analytics for 600 million square foot commercial and industrial markets throughout the San Francisco Bay area. Recognized nationally and regionally for innovative data management and analysis. Selected to serve on a national career development board for research services. Directed research staff of 12 in five Bay area markets.
Identified by brokers as a manager achieving service excellence.

• Development Feasibility Analysis
• Market Demand and Absorption Report
• Broker Opinion of Market Pricing
• Highest and Best Use Studies
• Real Estate Portfolio Analysis
• Strategic Positioning Study
• Market Rent and Vacancy Forecasts

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