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Oahu Office Market Report Q3 2021

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Delta Variant Dampens Office Market Recovery

At the end of 2Q2021, hope emerged that Hawaii’s efforts to curb the COVID-19 infection rate were successful. Infection rates declined and businesses eagerly anticipated a return to normalcy. Unfortunately, the virulent Delta variant emerged at the end of August, causing hospitalization and death rates to surge to their highest level since the start of the pandemic. Many businesses with plans to re-open their workforce after Labor Day were forced to revise their expectations and continue allowing their employees to work.

Reflecting these softened market conditions, Oahu’s office market posted a third-quarter 2021 loss of 27,280 square feet of occupancy as vacancy rates rose to 12.97%, the highest level since the pandemic began. Since the end of 1Q2020, the office market has lost more than 287,000 square feet of office tenancy, the equivalent of a typical 25-floor high-rise office building.


Key Takeaways

  • During 3Q2021, vacancy rates rose to their highest level since the pandemic started
  • Sublease space appears to have peaked
  • Delta variant impedes office market recovery
  • Oahu businesses adopt a hybrid workplace environment
  • Market projected to continue to soften through year-end 2021


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Oahu Office Market Report Q3 2021

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Related Experts

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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