Random Thoughts on Commercial Real Estate

My wife had to be in Honolulu for business for a couple of days, so I went along to "drive the car and carry the bags". I know it's a "tough" life, but someone had to do it.

However, I did take the opportunity to take a look at commercial real estate on Oahu while I was there.


Here are a couple of random thoughts.

• There's not a glut of commercial buildings because there hasn't been rampant building in Honolulu. I thought it was because of the amount of land available, but while it's a contributing factor, it's not the only one. The cost of bringing in the steel for the building is probably the major factor.
• There is actually quite a bit of land outside of Honolulu, but the roads and freeways (plus the tourists like myself who don't know where they are going) make it quite difficult to get anywhere quickly. The freeways in and around Honolulu are quite antiquated plus there are more "one ways" streets than I could imagine. There are actually traffic jams in paradise.
• The general consensus of the people I spoke with is that tourism is down 20 - 25% and it's going to be a tough 2 years. Of course, this means that there will probably be more retail spaces available for lease soon. However, Nordstroms just opened a huge store in the Ala Moana Shopping Center and they continue to build more condos.
• It doesn't appear that there's much of a zoning ordinance in Honolulu. There is some areas with a very interesting mix of buildings, businesses and homes.
• I wonder what the parking ratios are for strip centers. It was amazing how few spaces and how crammed together they were on some of the older strip centers.

Your comments are always appreciated. Thanks for reading.