DENNIS ODA / DODA@STARBULLETIN.COM James M. Piane this month replaced Andy Friedlander as chief executive of Colliers Monroe Friedlander, one of Hawaii's largest commercial real estate companies. He will oversee operations and manage the firm's brokerage activities and property management division.

Keeping the
track record going

The real estate veteran expects
'interesting opportunities' in 2005

James M. Piane James M. Piane, 61, is the new chief executive at Colliers Monroe Friedlander. » This month replaced Andy Friedlander as chief executive of commercial real estate firm Colliers Monroe Friedlander, where Friedlander remains principal broker. » Has managed properties in Hawaii such as Ala Moana Center, Bishop Square, 1132 Bishop St., Davies Pacific Center and the Pan Am Building. He has also managed properties in San Francisco as well as in Southern California and the Pacific Northwest. » Before Colliers Monroe Friedlander, he worked for Morgan Stanley subsidiary Equitable Real Estate Investment.

Question: Investors bought between an estimated $3.5 billion to $4 billion in Hawaii commercial property last year. What's your prediction for 2005?

Answer: As you saw, there's an interesting group of buyers, the capital markets are still quite frothy, interest rates are low, cap rates are low. I think there's going to be some interesting opportunities.

This coming year I think there's more properties that could change hands. The problem is there's a lot of money out there and not enough product. You can't fill the demand.

I think there's certainly owners that are going to consider selling and taking advantage of the current capital markets.

Q: Is there potential for more development of office space?

A: In some point in time, yes. I think that the occupancy rates have been increasing. They're starting to push the high 80s-90 percentile. Obviously, at this point in time there is nothing under construction, and assuming that the growth absorption continues, you can quickly come to the conclusion what's going to happen to rental rates. They're going to increase. As that happens, that will drive a need for additional space. The question is where would that space be?

I think there's certainly going to continue to be demand. Could that demand be satisfied elsewhere on the island? That's a question. What redevelopment opportunities exist?

Q: So you expect downtown office rents to keep rising?

A: I do. If you stop to think, if someone were permitted and started building and had a two- to three-year construction period in the interim, those rates are just going to increase. Those increased rates are what's going to justify any reconstruction.

Typically, in most markets, once you get past the 90 percent occupancy level you start seeing spikes in rental rates, and I certainly expect to see that happen. That assumes the continued absorption and growth of local business.

Q: An investment fund managed by Morgan Stanley, your previous employer, recently bought the Pearl Highlands Center. That was one of many deals that followed HRPT Properties Trust's $480 million purchase of former Damon Estate lands. Did that deal get the attention of a major player like Morgan Stanley?

A: That may be one of the transactions. But when you're looking at a quality property that gets marketed on a national basis, then you're going to see firms like that having interest in them. They like to establish and build their portfolios with a diversification in investment type and geograph- ical diversification as well.

Retail is a very hot investment type, something to be looked at very seriously in Hawaii.

Q: What brought you back to Hawaii from California?

A: I lived here from '92 until the end of 1995. I've been very active in the real estate community even before that time and after. I like Honolulu. I like the entire state. I like the people and the business over here.

I know I also enjoy the opportunity to work with a couple of founders such as Andy Friedlander and Don Monroe. They are a great success story. You learn a lot from people like that. Everybody can. They've got a long track record. They've built a company that's got a solid foundation. They've got a proven track record.

I think they've got the right priorities for a service company. They continue to focus on performance. Clients come first.