Industrial space vacancies are at an all-time low and rents are climbing. Pacific Business News Editor in Chief A. Kam Napier has more on what that means for local businesses.
If you need space in a warehouse in Honolulu these days, you’re in for a challenge. Vacancy rates are at a record low of 2%, compared to 7% national. And rents are up, too, to $1.17 per square foot, per month. That’s a six-year high, though it’s not quite as high as it was before the great recession.
As a result of the shortage, businesses are feeling squeezed and are changing their plans. One business we spoke to, called Cheer808, was forced to move its training facility for young cheerleaders out to Kapolei, instead of its original home in Honolulu. For Courier Corp. of Hawaii, one of the state’s largest delivery companies, a move out west wouldn’t make sense. Its solution has been to spread out, renting out space where available at multiple warehouses throughout Honolulu.
You’d think this high demand for industrial space would have developers rushing to supply new warehouses, but that isn’t the case. Rents, while climbing haven’t yet reached the point where investors could make any money off new warehouse construction.
There is one bright spot, however, Avalon Development Company has 177 acres of land in Kapolei zoned for industrial and most of its fee simple lots there have been sold. That development should help take the pressure off local businesses which are looking to expand.
