After posting a loss of nearly 125,000 square feet of tenancy in the fi rst quarter of 2017 due to the closure of Kmart and Sports Authority, the Oahu retail market rebounded generating more than 240,000 square feet of occupancy during the second quarter. Recent store openings by Mitsuwa Market and The Street by Michael Mina at International Market Place Sephora and Applebee’s at Ka Makana Alii regional mall, and Saks Off Fifth at Ala Moana Center, generated the majority of new occupancy growth. Year-to-date net absorption climbed to 122,299 square feet as the island-wide retail vacancy rate declined to 7.73% after spiking last quarter to 9.17%.
The second quarter improvement is a hopeful sign that the more than 1.5 million square feet of new retail space added to the market over the past two years is being absorbed. Additional store openings are planned for all of the new centers resulting in a steady decline to vacancy rates over the past twelve months.
The healthy absorption among Oahu’s regional malls was unfortunately off set by the Community Center/Power Center category, which suff ered from the closure of several big box tenants. Waikele Center’s loss of both Kmart and Sports Authority earlier in the year contributed to the Leeward submarket’s year-to-date loss of 116,412 square feet of net absorption.