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Halawa TOD Existing Conditions Report

The process of creating a TOD neighborhood plan is lengthy and involved. One of the first benchmarks is an existing conditions report. The Halawa Area Transit-Oriented Development Existing Conditions Report was recently released by DPP-TOD and it provides interesting reading. As one might expect, the majority of the report looks at present conditions and what exists in the area. I learned some interesting things that I did not know – Forty Niner Restaurant in Aiea is on the Hawaii Register of Historic Places and the Aiea Cemetery is located in the interchange between Kamehameha Highway and the H-201 and there are 475 graves of primarily Japanese immigrants from the early 20th Century. The cemetery is eligible for historic registration.

The final portion of the report makes some assumptions about potential development and re-development of the area. Not least amongst these is the enormous potential of the Aloha Stadium site. A well-planned multi-use facility would provide opportunities for expanded sports activities, entertainment, retail, ancillary office and perhaps even housing. All of this could be done while maintaining the highly popular Swap Meet (did you know more than a million people visit this each year?) and creating connectivity to the Pearl Harbor Visitor Center where more than two million people visit each year.

Add a rejuvenated Pearl Harbor Historic Trail (PHHT) to the above and we can create a world-class experience for residents island-wide as well as an enhanced experience for visitors.

Here is an achievable scenario: a young family in Waipahu decides they want to spend the day at Aloha Stadium. They take the train to Aloha Stadium and spend a couple of hours at the Swap Meet. Deciding they would like to take in a matinee, they store their purchases in a rental locker and enjoy a quick meal at one of the restaurants in the complex before the movie. After the movie, it is mid-afternoon and a gorgeous Hawaii day with the trade winds moving gently across Pearl Harbor. A bike ride home along the PHHT beckons so they rent bikes from the on-site bike rental facility and head out. Along the PHHT they stop for a shave ice at a refreshment/rest stop in Aiea before continuing on to Waipahu. In Waipahu they return the bikes to the bike share facility and head home after a day filled with fun, family time and outdoor activity.

There are many such scenarios one can imagine for the area. Creating it in the real world requires everyone to work together and to share a vision. One of the simplest places to start is with the PHHT and there is a re-newed energy and commitment from both the government and private sectors. I expect to see positive changes along PHHT in the next year.

Read the report or skim over it and pick the highlights. It will enlighten and hopefully inspire us to think boldly about the future while never forgetting the past and always enjoying the present.

Shop & Dine on the Line – good for now but what about the future?

HART rolled out its Shop & Dine on the Line program this week in response to intense frustration and fear on the part of many business owners who have lost revenue and customers due to rail construction. The problem appears simple on the surface – once the rail is built, customers will come back and all will be well. I contend this is very short term thinking. While I don’t disagree that short term support can be helpful, these businesses owners and HART itself need to start thinking now about what happens after the rail is built.

Business owners, is your business going to be able to attract customers who have the option of easily going down to the next stop or two to find something they prefer? What if the station where they board the train has a more robust and vital retail area than your stop even if you are closer to where they live? What if some forward-thinking property owner re-develops their property adding in shops, restaurants and services customers want and you are playing catch up in three to five years?

Another hard question: is your business struggling only because of rail construction or are your goods, food or services not attracting new customers because of changing preferences from consumers?

Now is the time to start having these conversations and asking these questions whether you are a stand-alone business, part of a larger development or a consumer who wants quality food, goods and services available now and in the future.

Lurking behind all of this is the larger issue of HART’s role in TOD. Technically one of HART’s mandates is to facilitate TOD but their focus remains fixed on actually getting the rail built. I understand that but there must be a balance and it is spelled out in the Vision Statement from HART’s 2016 Business Plan: “Land Use: Supporting the City’s land development policy by providing access to an area targeted for development of a new urban center and helping create transit-oriented development along the rail line. [Emphasis added]

And, HART’s TOD responsibility is not just part of an obligatory “vision statement”, it is mandated through the Revised Charter of Honolulu (Charter or RCH) “to promote, create and assist transit oriented development projects near fixed guideway system stations that promote transit ridership, and are consistent with the adopted community plans and zoning.” RCH 17-103.2(n).

I have listened to HART board members go back and forth with HART about TOD and the one thing that stands out is an unwillingness on the part of HART to fully engage on TOD. One gets the sense that HART just wants the TOD arm of the Department of Permitting and Planning (DPP-TOD) to deal with it when the reality is everyone needs to work together.

The old cliche “The future is now” has never been more apropos. Now is the time for HART to fully engage on TOD or we run the risk of having stations where there is nothing appealing or attractive to riders. The worst case scenario is having stations where passengers are picked up and dropped off in what are essentially urban ghettos. Ridership will suffer, anticipated increases in tax revenues will not be realized and the much-desired Live, Work, Play, Eat and Shop lifestyle simply won’t exist.

Major Changes in Hawaii Hotel Branding and Management

There have been major changes in the branding and management of Hawaii hotels over the last ten years. Hawaii hotels have become more upscale, more brand-oriented and better managed.

The story behind this phenomenon dates back to the late 1980’s and early 1990’s when the Japanese invested heavily but didn’t actively asset manage their hotel investments. Brands and managers were not challenged and Japanese companies did not reinvest in their properties. Hawaii’s hotel inventory deteriorated and many properties fell into disrepair.

In the late 1990’s and early 2000’s, sophisticated hotel investors purchased, renovated and re-positioned under-performing hotels in Hawaii. They have also brought in more sophisticated asset management, branding and revenue management. The result of the new investment in the visitor inventory, more sophisticated asset management and relative stability in Hawaii’s source markets has been dramatic RevPAR increases. Since 2009, RevPAR in Hawaii has grown at a compound annual growth rate of 10.2%.

In 2005, there were 17,700 rooms under global flags in Hawaii. Since then, global flags have added approximately 6,700 rooms that were not previously flagged. This is an increase of 38%.

Global brand and management changes over the last ten years


  • Waldorf Astoria brand and management of the 781-room Grand Wailea
  • Joie De Vivre management of the 80-room Coconut Plaza
  • Embassy Suites brand on 369 rooms in two towers in Outrigger’s Beach Walk project


  • Westin brand for the 791-room Moana Surfrider


  • Luxury Collection soft brand for the 526-room Royal Hawaiian
  • Courtyard by Marriott brand on the 404-room Wyland Waikiki
  • St. Regis brand and management of the 252-room Princeville Resort
  • Edition flag and management of the 360-room Yacht Harbor Tower


  • Courtyard by Marriott brand on the 311-room Aston Makaiwa
  • Holiday Inn brand on the 496-room Beachcomber Waikiki
  • Wyndham Grand brand on the 87-unit Koloa Landing Kauai


  • Disney brand on the new Aulani Resort at Ko Olina
  • Hyatt Place brand on the 451-room Ocean Resort
  • Courtyard by Marriott brand on the 455-room King Kamehameha Kona


  • Joie De Vivre management of the 125-room Shoreline
  • Courtyard by Marriott brand and management of the new 138-room hotel at Kahului Airport
  • Highgate management of the 830-room Pacific Beach Hotel


  • Andaz by Hyatt brand and management on the 347-room former Wailea Renaissance
  • Choice’s Ascend Collection for the 67-room Equus Hotel Waikiki


  • Montage brand on 50 units in the Kapalua Bay Residences
  • Holiday Inn Express brand on the new 75-room hotel in Kona


  • Autograph by Marriott brand on the 310-room Mauna Kea Resort
  • Courtyard by Marriott brand on the new 144-room hotel in Laie

The Future of Hotel Brands in Hawaii

The near term future for global brands in Hawaii looks bright. There are nearly 4,000 rooms that planned to be built for or will be converted to a global brand in the next few years. Some global brands that that are planned for Hawaii include:

  • Residence Inn by Marriott brand and management on the new 200-room hotel in Wailea
  • Holiday Inn Express on the soon-to-be renovated 600-room Maile Sky Court
  • Hilton Garden Inn brand on the 216-room Aloha Beach Resort Kauai
  • Hilton Garden Inn brand on the 663-room Ohana West Waikiki
  • DoubleTree by Hilton brand on the 388-room Naniloa Hotel Hilo
  • Hyatt soft brand on the 350-room Coco Palms resort on Kauai
  • Hampton Inn brand at Debartolo’s Kapolei shopping center development
  • Hyatt Place in Robertson Properties’ Live Work Play Aiea
  • Embassy Suites on the former Kisco site in Kapolei

Given that the majority of Hawaii’s visitor inventory in still not affiliated with a global brand, there is room for more growth. Branding of hotels, both globally and in Hawaii, will continue in the near term. However, I wonder when we will reach the saturation point. It will be interesting to see if there’s a backlash among customers. We’ve already seen smaller brands and hotel owners positioning their offerings as “anti-brands”.  In the meantime, I’m predicting more active global branding for Hawaii hotels.

An Overview of the Honolulu Rail Project and Transit-Oriented Development – Simply Put

After all the delays, law suits and speculation, the question is no longer whether rail is going to move forward but rather to understand and maximize the potential benefits of Transit-Oriented Development aka TOD. Simply put, TOD is development that focuses on land uses around a transit station or within a transit corridor.


  • Diversity of land uses
  • Mixed use development encouraged
  • Higher levels of density appropriate to the community
  • Mix of housing options and dedicated affordable housing
  • Intermodal connectivity including pedestrian, bikes and buses
  • Green infrastructure and open space
  • Low parking requirements and alternatives to car ownership
  • High quality design and strong sense of place and culture

The approach of the City and County of Honolulu has shifted over the past year or so from using concentric rings at ¼ mile and ½ mile around a transit station to outline TOD impacted areas. Now the approach is to identify TOD Zones that are more organic and specific to each station. This corridor-wide TOD Zone will be known as the TOD Special District and will eventually be governed by special zoning regulations similar to what we see in Waikiki. At present, there are special IPD-T (Interim Planned Development-Transit) guidelines available to encourage TOD in these areas now.


The guide way sweeps across the Ewa Plains. [Photo courtesy of HART]

The guide way sweeps across the Ewa Plains. [Photo courtesy of HART]

A remarkable transformation is taking place right now in West and Central Oahu as the rail project sweeps across the Ewa Plain into Waipahu and on to Pearl City and, sooner than you expect, to Ala Moana Center. The columns are rising and the guide way is forming while residents of communities along the route anticipate the day when they can ride the rail. Forward thinkers are deeply immersed in re-imaging what our communities will look like in five years, 10 years, 20 years and well beyond. Given that 60% of Oahu’s population lives along the rail corridor, the opportunities for shaping the future of how we live, work and connect are significant and worth serious discussion and consideration.

It is good to keep in mind that the entire TOD process is truly a work in progress. This is a once-in-a-lifetime opportunity for individuals and groups to have a significant impact on shaping the future of the community. Our Colliers TOD team has been impressed with the willingness of the DPP-TOD group to engage, share and listen.

Backed by our National Director, Rod Mullice, the local Honolulu TOD team provides a wide range of services to owners, investors and developers. Our Strategic Advisory Services include Opportunity Analysis, Transaction Management Process, Capital Markets and Brokerage.

Please contact us for further information.

Colliers Honolulu TOD Team
Gail Jennings
Project Lead
Transit-Oriented Development

Alika Cosner
Senior Associate
Transit-Oriented Development | Industrial

Ryan Marn (CCIM)
Transit-Oriented Development | Retail

Mark Bratton (CCIM, SIOR)
Executive Vice President
Investment Services

William “Bill” Froelich (CCIM, SIOR, JD)
Vice President
Investment Services | Industrial

Mike Hamasu
Director of Consulting and Research

Nanette M. Vinton
Research Consultant/Project Manager

First Quarter 2017 Industrial Market Summary

Another Record Low Vacancy Rate Established

Falling to its lowest level in recorded history, Oahu’s industrial vacancy rate registered a miniscule 1.53% at the end of the first quarter of 2017. Roughly 36,000 square feet of new occupancy growth was squeezed out of this extremely tight market. Industrial brokers have had to educate their clients about the lack of expansion or relocation options and the need to start their search as early as possible.

Read the full Oahu Industrial Market Report Summary


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First Quarter 2017 Office Market Summary

Oahu Office Market Starts Year with Positive Gains

The Oahu office market posted 33,517 square feet of positive net absorption for the first quarter of 2017. This resulted in a decline in the island-wide office vacancy rate from 12.66% at year-end 2016 to 12.43% in the first quarter. Office occupancy has flip-flopped over the past five quarters, but the overall pattern remained consistent with vacancy rates ranging between 12.0% and 14.0%.

Read the full Oahu Office Market Report Summary


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First Quarter 2017 Retail Market Summary

Kmart’s Closing Dampens Market

The Oahu retail market posted a loss of 124,960 square feet of net absorption at the end of 2017’s first quarter, resulting in an increased vacancy rate to 9.17% from 8.44% at year-end 2016. Underlying the contraction in the market was the vacancy left after the 147,000-square foot Kmart closed at Waikele Center in Leeward Oahu.

Read the full Oahu Retail Market Report Summary


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Korean Airline, Jin Air, Partnering with Island Air Means More Potential Buyers

Earlier this week, it was announced that Jin Air will be partnering with Island Air to offer inner-island connections from Seoul, Korea. This Korean airline will also resume their flights from Honolulu to Seoul five times a week starting May 29th. They paused this route due to maintenance on their Boeing 777 but it will be up and running very soon. We, at The Bratton Team, feel this announcement is a big step forward for Hawaiian-Korean relations especially when it comes to the commercial real estate market. As of now, Korea is our second biggest foreign real estate buyer and we are so excited that there will be flights 5 times a week directly to Honolulu. That means a lot more opportunities to sell and deal with these foreign investors, which could move Korea up to the number one spot over the next 5-10 years.

Last year, the single biggest purchase in Hawaii commercial real estate was made by a Korean investment company and this announcement will only continue this trend. We’ve noticed that our Korean investors have become more aggressive in the island market, as well as markets across the US. This partnership seems like a step in the right direction because Jin Air is going to bring so many more possible investors directly into Honolulu and Island Air will be able to connect those investors to the other islands seamlessly. As Dave Segal wrote in the Star Advertiser, “The agreement, which goes into effect today, means customers traveling on Jin Air between Honolulu and Seoul can connect to a neighbor island on Island Air, booking the reservation on a single ticket and checking luggage through to their final destination. The two airlines will have three interline routes, including Incheon-Honolulu-Kahului, Incheon-Honolulu-Kona and Incheon-Honolulu-Lihue. Jin Air will start interline sales today.”

It will be an easy booking process for these potential investors and tourists. We are excited for the opportunities for the commercial real estate market, as well as the opportunities for our economy and tourism on the islands! We can’t wait to see what great things this partnership will bring to Hawaii.

Read the rest of the Star Advertiser article here.

Check out Jin Air’s website here. 

Market Insights – Where We Are: Yet Another Year of Likely Moderate Growth

In short: The significant gap between so-called “soft data” (such as surveys of business and consumer confidence) and “hard data” (the factors that directly support GDP growth) suggest yet another weak start to the year, but stronger growth is in the offing. Overall, expect another year of moderate growth.

Although the Bureau of Economic Analysis (BEA) won’t release its first estimate of Q1 2017 GDP until Friday, expectations have been falling for the past two months. As shown in the chart to the right, the consensus forecast for first quarter GDP has fallen to an annualized rate of less than 1.5%, after starting the year at about 2.2% (blue line). The GDPNow forecast model from the Federal Reserve Bank of Atlanta has sunk even more, from 2.5% in late February to just 0.5% currently (green line).

And yet the so-called “soft” economic indicators are almost uniformly strong. The consumer confidence level, which is highly correlated with consumer spending, has climbed to its highest level since December 2000 — two economic cycles ago! However, this soaring consumer confidence does not seem to be translating into spending. Retail sales fell in March for the second month in a row, the first consecutive monthly decline since early 2015.


Meanwhile, the business sector is also in a buoyant mood. Surveys from the Institute of Supply Management (ISM) show attitudes among purchasing managers in both manufacturing and services are above their post-recession averages and collectively are near their high point in this cycle. And yet, output remains weak. Though the surveys generally have been trending upward since August, especially for manufacturing, industrial output has dropped in four of the past eight months.

This market snapshot was written by Andrew J. Nelson, Colliers International Chief Economist. To view the complete in-depth report, please click the link below.


Quarterly U.S. Update

New feature! Every quarter, Colliers U.S. will be releasing a round-up of their National Research Reports. We’ll post them here, but for quicker access, reach out to a Colliers Hawaii agent, as they have access immediately upon release.

Office Reports

  1. Law Firm Service Year-End Review and Outlook (collaboration with the Law Firm Services Group): Annual report on leasing by law firms in our top 20 office markets nationally.
  2. 2017 Healthcare Marketplace (collaboration with the Healthcare Services Group): Annual report on the state of the medical office buildings and related properties.
  3. Q4 2016 Top US Office Metros Snapshot (collaboration with the local researchers): Shorter, quicker-to-market report summarizing trends, conditions and outlook in the top 10 office metros, with key local market insights.
  4. Q4 2016 US Office Outlook (with interactive online dashboard, discussed below): Comprehensive year-end office sector report focused on outlook for 2017.

Industrial Reports, Blogs and Articles

  1. Q4 2016 US Industrial Outlook (with interactive online dashboard, discussed below): comprehensive year-end industrial sector report focused on outlook for 2017.
  2. North American Big Box Overview/Outlook (collaboration with the Logistics and Transportation Services Group): Highlights trends in the six largest big-box markets in North America.
  3. Interactive 10 Emerging Markets to Watch in 2017 (collaboration with Industrial service line and local offices): Interactive report with data and analysis for both landlords and occupiers on 10 growth markets in the U.S.
  4. A West Coaster Learns About Underground Warehouses:Blog focusing on underground warehousing in the emerging Kansas City industrial market.
  5. Is 2017 the Year of the Anticipated Coastal Import Shift: Blog focusing on port fundamentals and whether the Panama Canal Expansion will affect market share along the coasts of the U.S in 2017.
  6. U.S. Industrial was Unstoppable in 2016: Infographic previewing the 2016 year-end Report/Outlook.
  7. NAIOP Development Magazine Cover Story: Cover story of the Spring 2017 edition of NAIOP Development Magazine focusing on Urban Warehousing and highlighting Northern Stacks, a redeveloped urban warehousing park in Minneapolis, MN repped by Colliers.

Other Reports and Blogs

  1. U.S. Capital Flows Report and Outlook: Semi-annual report summarizing recent trends in the capital markets and outlook for the rest of the year.
  2. 2016 Multifamily Spotlight Report (collaboration with the Multifamily Services Group): Highlights trends, conditions, and outlook in the multifamily sector.
  3. State of the U.S. Market and 2017 Outlook Report: Outlook for the economy and the four major property types based on post-election impact analysis and “house views” developed with the Market Intelligence Panels.
  4. Appetizer or Entrée? How Food Continues to Fuel Retail (collaboration with the Retail service line): Analysis of how new restaurant and food concepts are exploding and opportunities are being created for retail centers.
  5. Market Insights February 16, 2017: Starting the Year on a (Relative) High Note: Blog summarizing economic conditions at the start of the new administration, and likely impacts on the property markets.