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Oahu Industrial Market Report Q4 2019

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Colliers Hawaii Industrial Market Report

Big Changes Planned for 2020 as Multiple Warehouse Developments Move Forward

Key Takeaways

  • The Oahu industrial market is essentially fully occupied. Of the remaining available spaces, many are functionally obsolete and have been on the market for years.
  • For the 2019 fiscal year, State of Hawaii Harbors Division reported a decline of 1 million cargo short tons processed through the Honolulu Harbor. This 9.04% drop in cargo tonnage represents a slowdown in activity among the island’s distributors and in turn affected the wholesale/distribution sector employment. Since last October, this sector posted a loss of 1,100 jobs.
  • The October 2019 year-to-date construction permit volume dipped by 12.3% from last year. This is a reduction of $230 million in permit spending. Both residential and commercial construction projects reported sizeable declines in permit spending of -39.75% and -49.79% respectively, possible indicating fewer planned construction projects for 2020.
  • As one of only a few locations left on Oahu with available parcels for sale and with industrial zoned land priced under $45 per square foot, West Oahu industrial parks recorded an estimated 128 acres of land sold for 2019, more than double the 2018 total acreage sold.
  • Between 2011 and 2017, the direct weighted average asking NNN rent for Oahu industrial properties increased at an alarming rate of 6.8%. Subsequently, rental rates fell and stabilized at $1.21 per square foot per month for the past two years.
  • Colliers is anticipating healthy leasing activity for new speculative and owner-user development activity. Year-end 2020 net absorption is projected to hit a decade record high as vacancy rates increase to 2.5%.

Summary Statistics

4Q2019 Industrial Market

 YTD Net Absorption:  (5,368) SF
 Vacancy Rate:  2.04%
 Direct Wtd. Avg. Asking Rent:  $1.21 PSF/Mo.
 Avg. Operating Exp.:  $0.41 PSF/Mo.

Oahu Industrial Market Report Q4 2019

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Related Experts

Mike Hamasu

Research & Consulting Director

Hawaii - Honolulu

Michael brings to Colliers Monroe Friedlander, Inc. 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 Value 
• Highest and Best Use Studies
• Real Estate Portfolio Analysis
• Strategic Positioning Study
• Market Rent and Vacancy Forecasts

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