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The growth in office space available for rent on Oahu in the first half of this year was almost the same as last year, a new study found. About 127,000 square feet, or the approximate equivalent of a nearly 13-story building, were added to the island’s available inventory from this year through June, after adding about 132,000 square feet last year, according to a report by local commercial real estate company Colliers International released Friday.
Much of the flood of available office space coincided with the loss of jobs and employees working from home last year as a coronavirus
Pandemic prevented the accumulation and damaged Hawaii‘s largely tourism-based economy. “It’s kind of a gray area at the moment what we’re going to do,” he said. “Are we
is downsized? Do we work from home or do we do something hybrid? It is a social experiment that is happening before our eyes. The uncertainty is still quite large. “
Mike Hamasu, the company’s director of research and advisory, said he anticipated the decline in occupancy in the Oahu office market
expand 10 to 20% over the next three to five years as leases expire and more employers determine how many of their employees can work remotely. The report cited a national survey by the industry group earlier this year, which suggests the number of full-time employees in an office will fall from 70% before the pandemic to 43% in the next 12 to 18 months.
“Since the Hawaiian economy first shut down in late March 2020, Oahu’s office market has been struggling to gain a foothold,” the Colliers report said. However, as the local economy has gradually recovered, a significant number of employers with office space have chosen to withdraw or downsize its use, even if business picks up again.
The Colliers report notes that the typical rental period for office space is three to five years, so the expected market shift is likely to develop fully over this period. This Washington, DC, Building Owners and Managers Association International survey received responses from more than 3,000 commercial office decision makers in 20 major US markets between March and May.
The vacancy rate for office space in Oahu of 12.4% at the end of June is above an 11-year low of 9.9% in 2019, but remains below the rate of 12.8% in 2018. From early last year to last By month, the roughly 259,000 square feet of additional available office space on Oahu increased the available space to 1.7 million square feet, representing a vacancy rate of 12.4% in a market of 13.9 million square feet of lettable space. Available areas include areas that are not rented to any tenants and areas that are rented to a tenant who does not want the area and is looking for a subtenant.
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