Industrial real estate to remain tight in 2007
Hawai'i's industrial real estate market will remain tight next year due to continued growth in the state economy, according to a new study.
In its year-end 2006 report, local commercial real estate firm Colliers Monroe Friedlander predicted that vacancy rates for industrial properties on O'ahu will remain in the 2.25 percent to 2.75 percent range in 2007 after hitting 2.28 percent this month.
Industrial properties include factories and warehouses. It does not include retail space.
Industrial property rent, which has increased nearly 50 percent since 2002, also will rise next year, the report said. During the past year, average rents on industrial properties have increased 11.5 percent to $1.10 per square foot per month.
Industrial properties are often considered a key measure of the local economy. A tight market can mean that the local industrial sector is growing.
In its report, Colliers noted that the existing 2.28 percent vacancy rate for O'ahu has risen from the 10-year low of 1.71 percent in 2004.
But that vacancy rate is still well below the 6 percent to 8 percent optimum level in which supply and demand are in balance, Colliers said.