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Oahu Investment Market Report Q4 2022

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Fed Rate Hikes Dampen CRE Investment Marketplace

Following the surge in Q4 2021 investment sales activity, the 2022 outlook was optimistic at the beginning of the year with the continued reduction in COVID-19 infections, followed by a triumphant return to market normalcy. Moreover, while economic concerns about inflation began to emerge, the Federal Reserve Board allayed investors’ concerns by labeling rising prices “transitory in nature.”

The Fed’s 180-degree turn during 2022 found a newly-adopted hawkish inflation posture that boosted the federal funds rate at a historic record pace from 0.7% to 4.33%. The seven increases to the federal funds rate put the CRE investment market on edge and adversely affected many borrowers’ ability to achieve target yields for their investments. The 30-year average mortgage rate exceeded 7% at the end of October 2022, an increase of nearly 400 basis points in ten months, dramatically slowing real estate investment sales and dampening development activity.


Key Takeaways

  • 2022 investment sales volume declined 24.9% when compared to 2021
  • Rapid hike in interest rates dampened 2022 investor activity
  • Bid-ask spread widened as buyers and sellers disagreed on property values
  • Multifamily and industrial remain hot investment commodities
  • Investors move to sidelines as recessionary fears create uncertainty

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Oahu Investment Market Report Q4 2022

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Mike Hamasu

Research & Consulting Director

Hawaii - Honolulu

Michael brings to Colliers 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 Market Pricing
• Highest and Best Use Studies
• Real Estate Portfolio Analysis
• Strategic Positioning Study
• Market Rent and Vacancy Forecasts

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