The Oahu office market posted 33,517 square feet of positive net absorption for the first quarter of 2017. This resulted in a decline in the island-wide office vacancy rate from 12.66% at year-end 2016 to 12.43% in the first quarter. Office occupancy has flip-flopped over the past five quarters, but the overall pattern remained consistent with vacancy rates ranging between 12.0% and 14.0%.
The Kakaako/Kapiolani/King submarket generated the lion’s share of the first quarter occupancy growth when it generated 45,945 square feet of new tenancy. Interestingly, Class C properties received a boost of 58,949 square feet of occupancy, the largest gain among the various office classes. Much of this growth is attributed to successful leasing efforts at 1500 Kapiolani Boulevard, which generated nearly 30,000 square feet of new tenancy over the past quarter.