Q. As the largest owner of office space in Honolulu, what is your outlook for the local commercial real estate market?

A. Our feeling is that the economy of Hawai'i is going to continue to be strong and the market will remain tight. The vacancy rate is around 7 percent now. It's a little hard to say exactly because there's some sublease space in the market that doesn't get counted. At this point there's a kind of a balance between a tenant's market and a landlord's market. Office properties are still selling at steep discounts compared to what it would cost to build them, and construction costs appear to be rising at a faster rate than rents. So, it is our belief that we have a long way to go before you reach a point where people start building new office towers and vacancies rise.

Q. When did The Shidler Group gain momentum?

A. We became very active starting in 2003 and in 2004. We acquired Waterfront Plaza in 2004 and we bought the First Insurance Building in 2005. (Last week, the Shidler Group purchased the ANA Kalakaua Center in Waikiki for $30 million.) We own about 2 million square feet of office space in Honolulu. It's about 13 percent of the Honolulu office market. On the Mainland, we own about 4 million square feet.

Q. Is there a difference between today's office market and that of the late 1980s and early 1990s market, when Japanese investors acquired billions of dollars in commercial real estate, only to see the market slump?

A. From a landlord's point of view, the rental market peaked in 1991. Between 1989 and 1996, about 1.5 million square feet added to the market. You had the construction of 1100 Alakea, 1132 Bishop, Ali'i Place, First Hawaiian Center and Harbor Court. There hasn't been a new major office building since First Hawaiian Center in 1996. In addition to the new space coming into the market, people started using their space more efficiently during that period. Tenants started relying on computers and databases and some law firms got rid of their books and law libraries.

Q. So has technology helped firms make better use of their space?

A. Our rough estimate is that the more efficient use of space had the impact of adding another 10 percent of supply to the market. So, at a time when the Hawai'i economy was slipping into a recession, an additional 3 million square feet of capacity came into the market. In a typical year, roughly 250,000 square feet of space will get absorbed. So, we had about 12 years (if not more) of supply come into the market over a relatively short period of time. Sure enough, that is how long it appears to have taken the office market to recover — we started seeing vacancy rates decline in 2004.

Q. You were trained as a CPA, how did you get into the commercial real estate business?

A. For many years, I had worked as a CPA and tax partner at Arthur Andersen. But back in May 1995, I decided I didn't want to be a CPA for the rest of my life and resigned from the firm. The Shidler Group was my biggest client; when I told them I was leaving public accounting, they offered me the job of chief financial officer. For me, it was a big move. If I don't count jobs I had in high school, I really only worked at two places, Arthur Andersen and the Shidler Group. After a couple of years, I migrated away from a purely financial role into overseeing the management and operation of the properties and became Managing Partner.

Q. How did your tax background prepare you for what you do?

A. It was pretty easy for me to make the move over here since I had been so involved in the acquisition and structuring of the real estate.

The real estate business is a very tax-oriented industry. So, I was very familiar with the financial side of owning and operating real estate. Since joining the firm I was able to learn the operational and leasing side of the business.

Q. In 2005, you were named volunteer of the year by Big Brothers Big Sisters of Honolulu. Tell me about some of your work for this charitable organization.

A. I became a volunteer big brother almost seven years ago. I found it to be a really worthwhile organization. I don't have any kids, and this has become my way of giving something back. I've been really fortunate to have great parents and great mentors in my business career — I felt like I needed to share something like others have done for me. It has been a real eye opener for me. You make a much greater impact than you think you will. When I first got into it, I thought it was going to be a lot more mentoring and stuff like that. It has turned out to be more like just being friends. There are times where I have the chance to talk about doing well in school, avoiding drugs, making good choices, etc., but most of the time we're shooting baskets, going to the movies, going to the auto show, or going to the water park.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.