There's a lot of activity in Hawaiʻi's commercial real estate market. It's a complex picture — one that not only includes industrial and office markets but also future residential housing.
There is some relief in sight for Hawaiʻi's maxed-out industrial space, according to Trent Thoms, senior vice president at CBRE.
Two of the firm's projects are adding capacity. One project is Kapolei Harborside, which was developed with the James Campbell Co. It is a 3-million-square-foot industrial spec warehouse near Kalaeloa Harbor.
The other is the Maui Airport Industrial Center in Kahului, Maui, which is expected to come online in the first quarter of 2025.
Kynan Pang, senior associate at Commercial Asset Advisors, has an eye on recent policies that could boost housing construction.
For example, House Bill 2090 would allow housing in areas zoned for commercial use, if signed into law by Gov. Josh Green.
At the county level, Pang is watching Bill 7, a Honolulu ordinance enacted in 2019 that temporarily allows for adaptive reuse of existing commercial projects to add a housing component.
In the office market, experts say costs are climbing for tenants, but landlords aren’t necessarily seeing that extra money. The higher prices cover shared maintenance fees commercial tenants pay.
Due to labor shortages and inflation, these fees have been climbing so much that landlords are wary of also increasing their rents.
Brandon Bera, the executive vice president of Office and Investment Services Divisions at Colliers International Hawaii, said vacancy rates in Downtown Honolulu are now just about what they were pre-pandemic.
But this a statistical artifact, when the reality is that condo conversions of office towers have reduced the available supply of commercial spaces.
