- For the first half of 2019, commercial real estate investment sales volume posted $1.29 billion, a dramatic 58.25% drop from last year. While the amount of investment dollars spent on commercial real estate slowed, the number of sales transactions for the year posted a solid 15.5% gain with the transaction counts increasing from 117 in June 2018 to 135 in June 2019.
- The lack of megadeal transactions (priced $100 million and above) is the primary reason for the dramatic drop in sales volume for 2019. So far, only three megadeals closed for a total of $454 million during the first six months of the year.
- For the first six months of 2019 Hawaii recorded only two international transactions. This decrease in international sales volume from a midyear 2018 total of $86.4 million to $20.42 million at midyear 2019 continued the downward trend that started since 2016.
- While sales volume for 2019 declined significantly, that has not dampened the enthusiasm of two institutional investors that have gone on a buying spree. Blackstone added the Courtyard at Marriott King Kamehameha Kona Beach Hotel and the Kalaeloa Rental Homes portfolio to their holdings. These acquisitions boosted their Hawaii investments to more than $2.2 billion since the beginning of 2018.
- When Alexander & Baldwin Inc. (“A&B”) sold 41,000 acres of land of Maui to Mahi Pono LLC in 2019, they were faced with the challenge of reinvesting the $262 million proceeds into alternative properties, this led to A&B’s aggressive acquisition of more than $217 million in properties during 2019.
- Capitalization rates remained virtually unchanged during the past year, only recording minor differences to retail and apartment property types that rose a few basis points over the past six months.
- The lack of megadeals in the first half of 2019 will place a dampening effect on the year-end 2019 investment dollar volume. Global volatility, exacerbated by rising trade tensions, will continue to inhibit foreign investment and Hawaii’s sales volume will drop below last year’s $5.15 billion record by 40% to 45% at the end of 2019.
Investment Summary Statistics
2Q2019 Hawaii Highlights
|Number of Transactions:||135|