Market Resiliency is Tested as Store Closures Stall Continued Growth
- For the first time in five years, Oahu’s retail market posted a loss of 41,717 square feet of negative net absorption as vacancy rates rose to 5.37%.
- Luckily, for Oahu retail centers, the majority of the vacated storefronts were quickly replaced by new tenants waiting in the wings. Even for the former Sears store at Windward Mall, there are rumors that several mid-box tenants are in active negotiations to fill portions of this space.
- The recent announcement of pending closures by Pier 1 and Bed Bath & Beyond will place another 43,000 square feet of vacancy onto the market as its resiliency is again tested.
- For Hawaii, visitor arrival counts were projected to exceed 10 million for 2019, setting an all-time high for the state. Oahu’s hospitality industry benefited from a new record when it welcomed nearly 5.2 million visitors for the first ten months of the year.
- For the second consecutive year, the October 2019 unemployment rate increased. Much of these job losses were attributed to the retail sector losing 3,000 positions over the past year.
- Colliers anticipates store closings will occur resulting in a second consecutive year of negative net absorption. Vacancy rates are forecasted to rise to near 6.0% by year-end 2020.
4Q2019 Retail Market
|YTD Net Absorption:||(41,717) SF|
|Avg. Asking Rent Range:||$3.60-$4.66 PSF/Mo|
|Avg. Asking Rent NNN:||$4.19 PSF/Mo|
|Avg. Operating Exp.:||$1.41 PSF/Mo|