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Oahu Office Market Report Q1 2021

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Office Market Suffers Record Losses

At the outset of the pandemic, many of Oahu’s businesses were forced to shutter their offices as a result of government mandated shelter-in-place requirements. More than a year later, many offices are still not fully occupied due to the Center for Disease Control’s (“CDC’s”) 6-foot social distancing requirement. As a result, Oahu’s office market posted a first quarter loss of 161,460 square feet of occupancy. This decline in net absorption exceeded even the worst quarterly performances that were reported during the Great Recession of 2008. In addition, Oahu’s island-wide office vacancy rate broke the record for quarter-over-quarter increases, jumping from 11.58% to 12.69% for first quarter 2021.  

On February 25, 2021, Honolulu Mayor Blangiardi announced that the City and County of Honolulu would move from Tier 2 to Tier 3 of the City’s Reopening Strategy. While many retail businesses are allowed to operate at full capacity under Tier 3, business offices are still being encouraged to work remotely. Uncertainty remains for these businesses, as they are still unsure when it will be safe for their offices to begin to welcome back all of their workers. 

Key Takeaways

  • Dramatic loss of occupancy for the first three months of 2021
  • Vacancy rates rose to 12.69%, a 110 basis point increase from Q4 2020
  • Office sector lost 7,500 jobs during the past year
  • Market forecasted to weaken through 2021

 

Office Stats


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Oahu Office Market Report Q1 2021

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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.

PROFESSIONAL EXPERIENCE
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.

CONSULTING ASSIGNMENTS
• 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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