Big Box Closures Continue to Impact Retail Market
- This past quarter, Sears closed its Windward Mall location leaving a 130,000 square foot vacancy that boosted Windward Oahu’s retail vacancy rate from 3.87% to 11.61% and increased the island’s overall rate.
- The Oahu retail market lost 102,398 square feet of occupancy during the second quarter of 2019, resulting in vacancy rates rising from 4.36% at the end of the first quarter to 5.00% at the end of June 2019.
- The growth in air passenger arrivals is projected to slow from 5.3% and 5.9% in 2017 and 2018, respectively, to a modest 2.6% this year. Visitor expenditure growth is forecast to slow to 1.1% in 2019, down from over 5.6% in 2017 and 2018.
- Over the past year, the single-family median home price fell to $766,750 for a 2.9% drop.
- Colliers projects that leasing activity should remain healthy for the near term, as several large retailers with pending occupancies are planned for the next few quarters.
- If an economic slowdown occurs, and is met with additional big box and soft good retailer closures, then it will create apprehension over our longer term retail outlook.
2Q2019 Retail Market
|YTD Net Absorption:||(27,649) SF|
|Avg. Asking Rent Range:||$3.56-$4.64 PSF/Mo|
|Avg. Asking Rent NNN:||$4.17 PSF/Mo|
|Avg. Operating Exp.:||$1.38 PSF/Mo|