HONOLULU (HawaiiNewsNow) -
Economic recovery is under way
in earnest in the Hawaii commercial real estate market. There are a lot more
deals, and the price tags are bigger.
The total value of such deals in 2012 was $2.21 billion,
up 81 percent from 2011, Colliers Hawaii said Friday. In the last peak year,
2005, transaction value reached $4.3 billion.
There were 182 deals over $1 million in value in 2012, up
34 percent from the previous year. Hotel deals accounted for only about 10
percent of the sales activity. Retail deals made up 42 percent of the total.
"Since the depths of the recession in 2009,"
the report said, "Hawaii commercial real estate sales volume has more than
For the first time in six years, all major commercial
property types rose - office, retail, industrial, hotel. Investors bought 56
apartment buildings in Hawaii in 2012.
Major deals of 2012 included the sale of Pearlridge
Center for $289 million, the move by Ala Moana Center owner General Growth
Properties to buy back the Sears lease for $250 million, and several headline
deals for less than $100 million including Lahaina Cannery, Lahaina Gateway,
First Insurance Center and the former St. Francis Hospital in Ewa.
All of those deals except the hospital sale came before
October, but more than half of the annual transaction value came in the fourth
quarter, when Colliers marked more than $1.15 billion in investment sales
transactions across Hawaii.
While distressed sales - where the seller was financially
obliged to sell - made up 45 percent of transaction volume in 2011, in 2012 it
accounted for only $100 million.
Colliers thinks the recovery has been driven in part by
low interest rates, both because it is cheaper to finance a commercial real
estate loan and also because investors are looking for higher returns than they
can get from money market funds and the like.
Another factor is the desire to move before Congress
changes the tax code, possibly unfavorably, as it seeks to reduce the growth in
the federal debt.