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Oahu Office Market Report Q3 2019

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Pendulum Continues its Swing from Tenant to Landlord Market

Key Takeaways

  • The Oahu office market continued its transition from a tenant towards a landlord’s market as market equilibrium is nearly achieved.
  • During the third quarter of 2019, more than 62,126 square feet of occupancy was added to the market, which resulted in vacancy rates falling to 10.32%.
  • Overall, 2019 year-to-date absorption totaled a healthy 215,353 square feet, its highest third quarter year-to-date total in more than twelve years.
  • The conversion of 1132 Bishop Street (“1132 Bishop”) office building into a residential rental project will, in the end, result in more than 300,000 square feet of commercial tenants being displaced.
  • Vacancy rates are projected to continue to decline as the planned floor by floor conversion of 1132 Bishop is executed.
  • As vacancy rates continue their descent, the reduction in available office space will prompt increased competition among prospective office tenants. By all account, recent lease comparables have indicated that some landlords who have witnessed competition for their office listings are already bumping up their initial asking base rents and reducing their tenant improvement allowances and free rent concessions.
  • Colliers forecasts that Oahu’s office market will continue to transition from a tenant market to landlord’s market within the next two years.

Summary Statistics

3Q2019 Office Market

 YTD Net Absorption:  62,126 SF
 Vacancy Rate:  10.32%
 Full Service Gross Avg. Asking Rent:  Island wide: $3.15 PSF/Mo
 Full Service Gross Avg. Asking Rent:  Class A: $3.01 PSF/Mo
 Full Service Gross Avg. Asking Rent:  Class B: $3.44 PSF/Mo
 Full Service Gross Avg. Asking Rent:  Class C: $2.89 PSF/Mo

Oahu Office Market Report Q3 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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