Tight market conditions persist as vacancy rates remain below 2.0% for the fourth consecutive year. At the end of third quarter 2018, a
loss of 13,049 square feet of occupancy resulted in a slight increase to the island-wide industrial vacancy from 1.82% to 1.85%. The addition of a few large listings in Campbell Industrial Park and Pearl City/Aiea contributed to this slight vacancy rate increase.
Despite the third quarter loss of occupancy, the 2018 year-to-date net absorption still remained positive at 49,719 square feet and vacancy rates declined from 1.97% at year-end 2017. As it stands, Oahu’s industrial market conditions will likely remain unchanged until new warehouse supply is added to the market. With urban industrial land values and construction cost increases positioning to inhibit new industrial development, it is unlikely urban Honolulu will encounter new warehouse development any time soon.