At the end of 2018, the industrial market posted its second consecutive year of occupancy losses. Despite the disconcerting 225,000 square feet of occupancy lost during this 2-year period, the dynamics of Oahu’s industrial market remain virtually unchanged. Oahu remained one of the tightest industrial markets in the country, even as vacancy rates rose above 2.0% for the first time in four years. Prospective tenants continued to face a challenging leasing environment, including a lack of prime available space, rising land prices, and a lack of warehouse development.
A quarterly analysis of the year helps shed more light on the cause of the occupancy losses. At the end of the third quarter, the industrial market had generated a positive gain of 49,719 square feet of year-to-date occupancy. The fourth quarter loss of 75,716 square feet reversed the direction of the market. Several new fourth quarter warehouse listings located at 91-300 Hanua Street in Campbell Industrial Park (28,320 sf), 938 Kohou Street (47,088 sf), and 115 Mokauea Street (19,714 sf) in Kalihi added a combined 97,000 square feet of additional vacancy and were primarily responsible for the occupancy losses incurred during the past quarter.