Retail space on Oahu
to fill up, study showsJ.C. Penney vacancies
expected to be leased
quickly, researcher says
Vacant retail space on Oahu will start filling up next year, stopping the decline in rents and even allowing landlords to begin raising rates again, according to a new study by the Honolulu commercial real estate firm Colliers Monroe Friedlander Inc.
While the numbers put together by Colliers researcher Mike Hamasu are different from those of other researchers, the trend is the same, moving from a big vacancy level this year to some filling up next year because of an improving economy.
The departure of the J.C. Penney stores at Ala Moana Center and Pearlridge Center at the start of this year emptied some 246,000 square feet of Oahu retail space. Amid other space coming available and being occupied, the island has been left with a net loss of some 192,000 square feet of retail so far this year. That resulted in a vacancy level of about 8.5 percent, Hamasu said.
But the economy is strengthening and there are active plans to fill some of the space, which should chop a point and a half off the vacancy rate, he said.
"The vacant J.C. Penney's space at Ala Moana and Pearlridge Centers will likely be leased quickly and occupied by year-end 2004. We forecast that Oahu's retail vacancy rate will fall to 7 percent and that rental rates will stabilize and begin increasing in the near future," Hamasu said in the report.
General Growth Properties, owner of Ala Moana Center, has announced plans to divide the J.C. Penney space among some 30 specialist retailers.
Other commercial real estate researchers in Hawaii have said there are already signs of retail space filling up and they agree that the vacancy level should fall next year.
