The Honolulu office market remained flat in the third quarter of this year, although gross rents have gone up due mostly to higher operating costs, according to the latest MarketView report from CB Richard Ellis.

CBRE places the Honolulu office vacancy rate - or availability - at 9.3 percent, which is relatively flat. At the end of 2007, the availability was at 9.5 percent.

Approximately 1 million square feet of office space is available in the metropolitan office market, more than half of it in downtown Honolulu's central business district.

“;Everybody seems to have a wait-and-see attitude,”; said CBRE's managing director Joe Haas. “;In times of economic uncertainty, tenants and landlords tend to try to keep the status quo.”;

The weighted average gross asking rent for Honolulu went up about 15 cents from last year to $2.99 a square foot per month.

Most of this can be attributed to increases in operating expenses, which went up by 13 cents, driven mostly by energy costs.

Haas said that for the first time, landlords passed along an estimated operating rate increase mid-year due to the escalating price of oil, which is unprecedented. Usually, those costs are estimated and quoted based on the previous year.

The office market is consistent with current economic trends, according to the report, given that unemployment in Hawaii has climbed to 4.4 percent, a level that state hasn't seen since early 2002.

Tenants moved out of a net total of about 34,000 square feet, resulting in negative absorption for the third quarter. For the year so far, more people have filled space than vacated it, resulting in about 20,000 square feet of positive absorption.

Haas said the Honolulu office market still has sound fundamentals, with low tenant delinquencies, while there won't be much office construction in years to come.

The pendulum in the office market has swung toward the tenants, who are being offered more enhanced leasing incentives from landlords.

Tenants, however, are tightening their belts in these tough economic times, and more likely to give back excess space.