Businesses vacated a big chunk of O'ahu office space in the first three months of the year, marking a third consecutive quarter of rising vacancies.

More empty office space is another indication that Hawai'i's economy is weakening.

Local commercial real estate firm Colliers Monroe Friedlander reported that 40,971 square feet of vacant space was added to the market in the first quarter, pushing the vacancy rate to 7.71 percent from 7.27 percent at the end of last year.

In the last three quarters, a total of about 150,000 square feet has become vacant, and there could be more to come.

"My guess is this market is going to be either moving sideways or vacancy rates are going to increase over the near term," said Mike Hamasu, director of research and consulting for Colliers Monroe Friedlander.

The emptying of office space could get worse in the next quarter because of expected impacts from the shutdown of Aloha Airlines' passenger service and ATA, another airline that served Hawai'i, Hamasu said.

According to Colliers, a 10 percent vacancy rate is considered an equilibrium at which tenant and landlord leverage is balanced. So at just under 8 percent, O'ahu's office vacancy rate isn't bad for landlords, especially when considering the rate two years ago was at roughly 8 percent.

Still, quarterly net losses of occupied space that began emerging at the end of 2006 suggests a negative trend may be emerging.

"In the last six quarters, we've had five quarters of negative absorption," Hamasu said. "That's not a positive sign. It's a reversal of the growth in our market."

Colliers said the emptying of office space last quarter was largely because of consolidation by a few large companies including NCL America (Norwegian Cruise Line), DFS Group (Duty Free Shoppers) and Kaiser Permanente. There also were some mortgage company closings as trouble in the residential loan business persists.

Office space available for sublease since the end of last year is up 20 percent to about 118,000 square feet, which is roughly equivalent to an empty 12-story building. However, Colliers said landlords still maintain a strong position in the market because high construction costs make it expensive for tenants in search of a better deal to relocate.

Average asking rents haven't come down, according to the survey, which reported O'ahu's average full-service gross rent sought by landlords for vacant space was $2.79 per square foot per month in the first quarter compared with $2.76 at the end of last year.

Compared with major Mainland metropolitan areas, office vacancy in Downtown Honolulu was 8.6 percent, but was 10th-lowest among 53 cities surveyed by Colliers International, of which the local Colliers office is an affiliate.

The Colliers International survey found Honolulu's suburban office buildings had the lowest vacancy rate of all markets surveyed. Only 6.8 percent of this space was unoccupied during the first quarter.

The survey reported that the nationwide average vacancy rate was 12.8 percent during the first quarter. That was the second increase in two quarters, but rents still rose. Part of the disconnection between falling occupancies and rising rates is that tenants expect lower rates while landlords feel confident with occupancy rates near historic highs.