In real estate, Hawaiʻi’s office and housing markets have moved in opposite directions. What will 2022 bring to each?
According to the latest figures from Colliers International Hawaiʻi, Oʻahu’s office market shed more than a quarter-million square feet of occupancy over the past two years.
This was driven by business closures, office downsizing and accelerated trends toward remote work. Vacancy rates grew from a pre-COVID 10% to 13%. That’s only 3 percentage points, but a swing of a sizable 33%.
Office spaces have slowly started refilling recently, however.
Some 40,000 square feet of space saw new occupants in the fourth quarter of 2021 and the overall vacancy rate now stands at nearly 13%.
The growth has not been shared equally.
The Central Business District actually got slightly emptier. The neighborhoods of Kalihi, Iwilei, Kapalama and Windward Oʻahu saw the most positive growth in occupancy.
Colliers sees some positive signs in these numbers, including the term length of the most recent leases signed. These are up from an average of 32 months to 46 months, reflecting growing confidence on the part of tenants.
On the housing front, Hawaiʻi brokers, who just had a record-setting 2021, expect more of the same. High prices have been driven by high demand and low inventory, neither of which are abating.
Matt Beall, CEO and principal broker of Hawaiʻi Life, predicts interest, and activity, will be especially high in the luxury and ultra-luxury markets.
