Thinking about moving to a warmer climate? Here is what our Hawaii Local OfficeFinder Member tells us about the Honolulu Office Space Market:
The Honolulu office market ended 2010 by continuing its occupancy slide. Nine of the last ten quarters have seen negative absorption. The 4th quarter saw 61,382 square feet of negative absorption bringing the 2010 total to negative 216,997 square feet. Vacancy increased to 12.1% vacant, 0.6% higher than the previous quarter and 1.9% higher than the same time in 2009. The islandwide average asking full service gross rent increased $0.03 during the quarter to $2.99/sf/mth. Operating expenses, which are included in the gross rent figure, decreased by $0.02 to $1.26/sf/mth. Asking base rent increased by $0.05/sf/mth during Honolulu CBD Class A Office Snapshot - 4th Quarter, 2010 the quarter, however the spread between asking and taking base rents is larger than in recent memory.
Weak Job Growth and Limited Tenant Demand
Although job growth turned positive in the 3rd quarter of 2010, it is forecast to remain weak through 2011. Because of a relentless push to reduce costs including rent, most businesses are putting more people in fewer square feet. The result is that the market needs slight job growth to offset this effect.
A 12% vacancy rate is a lot better than many other office markets!
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According to their 2011 U.S. Macro Forecast report by Cassidy Turley from the WSJ, Shadow office space has been affecting the office space for lease recovery already.
In the article, "The U.S. office sector needs to absorb 126 million square feet of
empty space to return to pre-recession vacancy levels, the forecast
says. The number of “office-using jobs” created last year should have
resulted in 53.1 million square feet of office absorption for 2010. But,
because of shadow space, only 18 million square feet of space was
absorbed for the year.
But the report says the drag of shadow space will be less severe this
year, and vacancy rate will move down (it was 16.7% in the fourth
quarter). Still, vacancy won’t reach pre-recession levels — between
12.5% and 13% — before 2014. And rents will remain where they are now
for another two years."
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The Royal Bank of Scotland (RBS) has upgraded Regus, the worlds largest provider of executive office suites, to a buy, from hold, as it believes earnings can surpass a previous peak.
RBS analysts believe that the company is a good play on the continuing US economic recovery and continued emerging market growth.
With confidence in US small to medium sized businesses improving, RBS says that this is good news for Regus, which derived 42% of its 2010 first half revenues for North America.
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Colliers recently published it's 4th Quarter 2010 Office Highlights report for the US and Canada.
- Office Markets Look and Feel a Lot Better - But Higher Rents Still Some Way Off.
U.S. office vacancy rate down sharply - U.S. office market has unquestionably turned the corner.
Office occupancies up for a third consecutive quarter.
Rent picture again mixed.
Office construction slows to a trickle.
Some other interesting results:
- Highest US Downtown Office Vacancy Rate - San Jose/Silicon Valley at 27.9% (down from 35% the previous quarter)
- Highest US Suburban Office vacancy Rate - Las Vegas at 38.6%
- Most Absorption for 2010 - Washington DC metro area at over 4.1 million square feet (Midtown Manhattan a close second at nearly 3.6 million square feet)
- Lowest US Downtown Vacancy Rate - Raleigh/Durham at 5.3% (with a 33.8% suburban vacancy rate)
- Averages - Downtown Vacancy Rate 16% - Suburban Vacancy Rate 18.3%
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Office vacancy index picks Packers in Super Bowl | Chicago Breaking Business
JLL "looked at vacant office space in team’ cities since 2000 and found that in seven of the cases, the team whose city had higher office vacancy rates brought home the Lombardi Trophy."
Kind of a safe pick in by book. In any case, as a Seahawk fan, I could never root for Pittsburgh! Go Packers.
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