Vacancy rates for Honolulu's office market dropped in the fourth quarter; however, the improvement was not great enough to prevent the city's year-end vacancy rate from soaring to its highest level in six years or to keep the year-end gross asking rent from falling for the first time in seven years.

Though 17,683 square feet of office space was rented during the fourth quarter of 2009, Colliers Monroe Friedlander reported yesterday that by year-end Honolulu had lost 184,780 square feet of office occupancy to layoffs, postponed hiring, business consolidations and closures. For the year, Honolulu's vacancy rate rose by 172 basis points to 10.32 percent, and gross asking rent fell to $2.74 per square foot, a 3.45 percent decline from year-end 2008. Colliers forecast that job growth is expected to lag recovery and could cause Honolulu office vacancies to rise to 12 percent by 2011.