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. |
