Market Variability Returns
After posting more than 170,000 square feet of positive absorption over the past two quarters, the Oahu office market changed direction and recorded 63,698 square feet of lost occupancy for the second quarter of 2016. This negative absorption brought year-to-date absorption down to 16,892 square feet and resulted in vacancy rates rising to 13.06% from 12.15% in the first quarter.
“We had hoped the office market would gain traction with the recent solid job growth, but unfortunately volatility remains, as the vacancy rate rose for the first time in three quarters.”
– Neal Hafner (S), Senior Associate
While many landlords had hoped that the market was beginning to stabilize and generate healthy traction, the second quarter performance confirmed that the office market volatility is likely to persist. Over the past twelve quarters, the vacancy rate has fluctuated between 12.12% and 13.55%. This is the ninth time in the past three years that the office vacancy rate rose above 13%.