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Commercial, housing investment sales fall


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POSTED: Tuesday, March 17, 2009

A sharp softening in Hawaii's commercial and housing investment market during the fourth quarter caused the total value of year-end sales to fall 50 percent in 2008 from a year ago, according to a new report.

Investment sales in the commercial, industrial, apartment, agriculture, and resort/hotel markets dropped during the fourth quarter of 2008 as uncertainty in the real estate and credit markets stalled Hawaii's commercial investment market, said Jeffrey Hall, senior director of research for the local office of CB Richard Ellis Inc., which yesterday released its fourth-quarter report for the statewide investment market.

“;The commercial real estate slowdown in Hawaii is reflected in the scarcity of debt and equity, an increase in the time a property is on the market, and the expectation gap between the price sellers want for their properties and the price buyers are willing to pay,”; Hall said in the report.

Total investment transactions over $5 million fell to $892 million in 2008 from $2.5 billion in 2007. Total investment transactions in the $500,000 to $5 million range fell to $1.5 billion in 2008 from $2 billion the year prior. Total re-corded mortgages for investment properties over $500,000 dropped to $1.9 billion, which was a decrease from the $2.4 billion that was realized in 2007.

However, on a more positive note, Hall said that Hawaii's commercial markets have not been overbuilt like so many mainland markets. Nationally, sales of commercial properties in 2008 have dropped as much as 70 percent from the year prior, he said.

“;It remains to be seen if those fundamentals keep the Hawaii markets from experiencing the full impact of the capital crisis on the mainland,”; Hall said in the report.