The Oahu retail market generated 34,830 square feet of new occupancy in the first quarter of 2018. With seven of the nine Oahu retail trade areas posting positive net absorption, Oahu’s vacancy rate fell from 6.82% to 6.19% since the end of 2017. The majority of the market’s occupancy gains occurred among the island’s recently built or redeveloped centers.
At mid-year 2018, the Oahu retail market posted a healthy gain of 222,919 square feet of occupancy. Vacancy rates dropped this quarter to 6.09% from the peak in 2016 of 8.36% . The majority of these tenancy gains occurred at regional malls. Ala Moana Center and Ka Makana Ali’i generated a combined 172,180 square feet of net absorption during the first six months of this year. The regional mall vacancy rate declined from 5.91% recorded at year-end 2017 to 2.78% at the end of 2Q2018. Fueled by new retail development and mall expansion, regional centers garnered more than 1.3 million square fee of net absorption during the past three and a half years.
At mid-year 2018, commercial real estate investment sales volume established a new, six month record of $3.09 billion. This boost in sales volume was led by eight mega-transactions tallying at more than $100 million apiece. The largest transaction was the purchase of the $1.1 billion Grand Wailea Resort which was acquired by BRE Iconic Holdings (Blackstone Group LP) from GWR Wailea Property LLC (GIC – Government of Singapore) in April 2018. The deal resulted in a four-year, 42% gain for GIC, which had purchased the Grand Wailea Resort for $774 million in 2014.