Major commercial real estate purchases in Hawai'i last year fell to a four-year low as economic jitters and tightened capital sapped the interest and ability of investors to buy Isle hotels, shopping centers and other property.

That's the conclusion of a report by local commercial real estate firm Colliers Monroe Friedlander, which tracks annual statewide sales of office buildings, hotels, shopping centers, apartment complexes, warehouses and undeveloped land valued at more than $1 million.

Colliers said there were 269 such purchases last year for a collective $3 billion, down from 350 purchases and $3.8 billion in 2006.

The decline was the second in two years for the market that peaked in 2005 at 431 sales valued at $4.3 billion.

Colliers said investor losses from the subprime residential loan meltdown hurt the commercial real estate market by making financing more difficult and expensive.

Reacting to the subprime mess, investors and lenders applied tougher underwriting criteria and scrutiny of commercial real estate deals, which resulted in prospective buyers seeking higher returns based on more conservative financial estimates.

"There still appears to be equity looking for real estate, it just wants higher returns," Mike Hamasu, Colliers research and consulting director, said in the report.

Hamasu said that continuing tightness in global capital markets and a slowing economy likely will lead to fewer commercial property acquisitions in Hawai'i this year, perhaps $2.4 billion in deals.

Even with last year's commercial property investment slowdown, the number of sales was nearly double what it was in 2003 and more than three times the volume in 2002.

"We had quite a run-up in the last five years," Hamasu said.

Last year, two resort properties accounted for a third of the value of all sales. One was Makena Resort and the Maui Prince Hotel bought by Maui developer Everett Dowling, luxury hotel firm Trinity Investments and Morgan Stanley Real Estate for $575 million. The other biggie was the $445 million purchase of the Hyatt Regency Waikiki by Hyatt Corp.

Other notable purchases included the Kukui Gardens multi-family rental complex in downtown Honolulu for $131 million, the Kaka'ako office complex Pacific Park Plaza for $85 million and the former Bougainville Costco building for $28 million.

According to the report, hotels as a group accounted for $1.5 billion in sales last year, compared with $603 million in retail property, $357 million in land, $284 million in multi-family property, $159 million in industrial buildings and $51 million in office buildings.

The highest number of transactions was in the industrial category at 77, followed by 69 in retail, 59 in land, 55 in multi-family, 33 in office and 16 in hotels.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.