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Flatness continued to define Oahu’s office leasing market during the first half of this year, following a trend established last year, a new report shows.
Office tenants filled just 323 square feet more space this year through June compared with what was occupied at the end of last year, according to a report by commercial real estate firm Colliers International.
The relatively tiny amount of additional space leased — about as much area occupied by a handful of cubicles — left the vacancy rate at 13 percent, which is where it has been since the end of 2011.
The rate represents 1.9 million square feet of vacant space out of 14.6 million square feet of available space.
A positive takeaway is that a five-year stretch where office vacancies rose is now further in the past. But at 13 percent the vacancy rate is stuck at a decade high. The recent low was 7 percent in 2006 before market weakness emerged in the face of a recession.
Colliers said it is normal for there to be a lag between economic recovery that produces job growth, and a decrease in office vacancy.
The company, in a January report, said it expects vacancies to decline slowly through the next two years to nearly 12 percent by the end of 2014. Colliers reiterated that projection in the new report.
The latest report said businesses that typically occupy office space, such as financial services and technology firms, added 1,533 jobs on average in each of the last three years, representing 1.7 percent annual growth. "If this pace continues, there should be an increase in office net absorption for 2014," the report said.