Industrial Market Rebounds to Pre-Pandemic Levels
Oahu’s industrial market proved its resilience as more than 307,000 square feet of occupancy growth during the first half of the year brought vacancy rates down to 2.29% at the end of 2Q2021. Moreover, despite the delivery of over 450,000 square feet of new warehouse product in the third quarter of 2020, pent-up demand fueled healthy leasing activity in 2021. As a result, vacancy rates, which had risen to a nine-year high of 3.05% at year-end 2020, fell back to pre-pandemic levels.
The industrial market’s performance directly corresponds to the ebb and flow of the economy. At the height of the pandemic, industrial tenants and landlords postponed leasing decisions as deal velocity fell and lease term lengths shortened. The recent improvement to Oahu’s economy with its increase in air passenger counts, boost in retail spending, and surge in residential home sales will continue to bolster the performance of the industrial sector for the rest of 2021.
Key Takeaways
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Malakole Industrial Park and 91-150 Hanua Street developments spur increased year-to-date leasing activity
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Year-to-date occupancy growth surges above 307,000 SF
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Tight market conditions to persist as development activity ramps up
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Pandemic fears begin to subside as business optimism returns
