Struggling to draw in and keep tenants, the Oahu office market has lost more than 151,000 square feet since the end of June 2017. The softening office market’s fifth consecutive quarter of dwindling tenancy pushed vacancy rates upward to 13.19%. The third quarter loss of 10,759 square feet of office occupancy decreased the year-to-date total to a negative 63,446 square feet of net absorption.
During the past three quarters, several building owners have contemplated converting their office buildings into residential or hotel properties. While conversion plans are still in the works, it’s unlikely these proposed projects will impact the downtown office market before the end of the year. However, the pending relocation of American Savings Bank to its new corporate headquarters near Aala Park is expected to impact occupancy rates for the first quarter of 2019.