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Oahu Office Market Report Q4 2019

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Transition to Landlord Market Completed

Key Takeaways

  • After years of market stagnation, Oahu’s office market posted a robust net occupancy gain of 272,429 square feet in 2019, resulting in a 9.93% year-end vacancy rate, its lowest level in eleven years.
  • Within just twelve months, Oahu’s office vacancy rate fell from 12.79% to 9.93% for an unprecedented 2.86 percentage point decline. Colliers pegs 10% as the equilibrium point – where the bargaining power of landlords and tenants is balanced.
  • The redevelopment of 1132 Bishop is anticipated to take up to three years to complete and the relocation of its existing tenancy should result in more than 320,000 square feet of occupancy growth for Oahu’s office market in total.
  • Leasing activity for 2019 got a tremendous boost when large tenants such as Hawaiian Electric Company, Hawaii Pacific University, Atlas Insurance Agency, Tradewind Capital Group, Hilton Grand Vacations and Aston Resorts either consummated leases or officially relocated.
  • Of the various employment categories, the office and retail sectors posted the greatest number of job losses during the past year. Most office job losses occurred among the professional/services and financial service categories, which lost 1,900 and 1,100 jobs respectively.
  • For 2020, Colliers believes that the Office market will continue to generate positive occupancy gains, pushing the island-wide vacancy rate even lower to a projected 9.4%.

Summary Statistics

4Q2019 Office Market

 YTD Net Absorption:  272,429 SF
 Vacancy Rate:  9.93%
 Full Service Gross Avg. Asking Rent:  Island wide: $3.16 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 Q4 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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