Oahu’s industrial market posted negative net absorption of 87,576 square feet for the second quarter of 2017, reversing the positive gains established during the first quarter. Vacancy rates rose to 1.75% from 1.53% and year-to-date net absorption was negative 60,504 square feet. For the past three years, Oahu’s industrial vacancy rates hovered near 2.0% reflecting a challenging leasing market for industrial tenants.
For the first time in six years, the number of available industrial listings increased. There were 112 availabilities at year-end 2016. This number increased 33.9% to 150 listings six months later. While this bump in listings is welcomed, tight market conditions will continue to generate increased competition for higher quality spaces. In a market where there are several functionally obsolete properties, the building quality of new listings greatly influences the speed in which they are leased. The recent jump in listings is the direct result of several 10,000 to 20,000 square foot spaces that became available in the Kalihi submarket.