After nearly 20 years of stagnation, the Honolulu office market has seen a dramatic turnaround in 2019. A combination of Hawaii Pacific University moving from Class B and C office buildings to the Class A Waterfront Plaza and the beginning of conversion of Class A Bishop Place combined to decrease the overall market vacancy by 2.5% and the CBD Class A submarket by 6.3%. The CBD Class A submarket (50% of Honolulu’s inventory) now stands at 10.2% vacant, and the entire Honolulu office market stands at 10.3% vacant. Conventional wisdom says that 10% vacancy is the tipping point from a tenant’s market to a landlord’s market. HECO announced a 195Ksf lease at Alii Place which will remove 100ksf of vacancy in early 2020 and displace another 95ksf of tenancy, all of which will push the Honolulu office market firmly into a landlord’s market.
Honolulu’s Office Market Changing to a Landlord’s Market
