Hawaii's commercial real estate market is dynamic. It's a complex landscape that includes not only industrial and office properties, but also future residential properties.
Some relief is on the way for Hawaii's marginal industrial space, according to Trent Toms, senior vice president at CBRE.
Two of the company's projects will add capacity: Kapolei Harborside, developed in partnership with James Campbell Cos., a 3 million-square-foot industrial-grade warehouse near Kalaeloa Harbor.
The other is the Maui Airport Industrial Center in Kahului, Maui, which is scheduled to begin operations in the first quarter of 2025.
Kinan Pang, senior associate at Commercial Asset Advisors, noted recent policies that could spur homebuilding.
For example, House Bill 2090, if signed into law by Gov. Josh Green, would allow residential construction in areas designated for commercial use.
At the county level, Pan is keeping a close eye on Honolulu Ordinance No. 7, enacted in 2019, which temporarily allows existing commercial projects to adaptively reuse and add residential components.
In the office market, experts say costs for tenants are rising, but landlords aren't necessarily pocketing the extra money. The price hikes cover shared maintenance fees paid by commercial tenants.
Labor shortages and inflation have caused those rates to rise sharply, making landlords wary of raising rents.
Brandon Vela, executive vice president of office and investment services at Colliers International Hawaii, said vacancy rates in downtown Honolulu are currently about the same as they were pre-pandemic.
However, this is a statistical artifact, and in reality the supply of commercial space is decreasing as office towers are converted into condominiums.