Hawaii commercial real estate investment sales volume declined by nearly 25% over the past year, falling from $4.1 billion recorded in 2016 to $3.08 billion for 2017. This is the third consecutive year of decreased sales since the record high volume of $4.57 billion posted in 2014. This decline corresponded to the slowdown in sales volume experienced across the country.
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.
Vacancy rates rose to 12.66% from 12.38% over the past quarter, as 61,190 square feet of lost occupancy was generated in the fourth quarter, bringing the total year net absorption to 42,103 square feet. While this is the second consecutive year of positive occupancy gains for Oahu’s office market, vacancy rates have zigzagged over the past five quarters and have not set a definitive direction for the market. It has been seven years since the end of the Great Recession and while many other commercial real estate sectors have boomed, the office market still remains mired in mediocrity.
The industrial market continues to get squeezed tighter and tighter. The Oahu market posted a second quarter gain of 61,411 square feet of net absorption, pushing the year-to-date occupancy gain to 129,093 square feet. As a result, the island-wide industrial vacancy rate fell to another record low at a miniscule 1.33%.