Vacant retail space ticked up on Oahu last year
STAR-ADVERTISER / 2016
Forever 21, a men’s and women’s clothing retailer at the Royal Hawaiian Center in Waikiki, was one of the anchor stores that closed last year, but other store openings helped level out the shuttered businesses.
A couple of mall anchor tenants going out of business on Oahu put a ding in Oahu’s retail property market last year.
But a new report tallying up vacant space at retail centers around the island suggests that shoppers shouldn’t fret because the continual cycle of new stores replacing old ones almost kept up with the losses last year.
The report by commercial real estate firm Colliers International released for publication today said that 41,717 square feet more retail space was vacated than filled last year, ending an eight-year run of more space being filled than vacated.
Last year’s decline was mainly driven by Sears shuttering 130,000 square feet of space at Windward Mall and Forever 21 closing its 42,520- square-foot store at Royal Hawaiian Center in Waikiki.
The Sears and Forever 21 spaces are still empty, but many new retailers filled other vacant space that nearly offset the amount of space vacated by the two anchor tenants and other retailers that included GNC, Gymboree and Payless ShoeSource on Oahu last year.
Retailers that opened last year included Marshalls in Honolulu and Kapolei, Daiso in Honolulu and Pearl City, Safeway in Waikele and Down to Earth in Kailua.
“Luckily for Oahu retail centers, the majority of vacated storefronts … were quickly replaced by new tenants that were waiting in the wings,” Colliers said in its report.
The net reduction in occupied space nudged up Oahu’s retail vacancy rate to 5.4% last year from 5.3% the year before. The total amount of empty space last year was 917,637 square feet out of 17.1 million square feet.
Over the past decade, Oahu’s retail vacancy rate has ranged from a 3.8% low in 2010 to an 8.4% high in 2016. The vacancy rate during that time was influenced by a lot of new space added to the market, including expansion of Ala Moana Center and Ka Makana Alii being built in Kapolei.
However, ever since 2011 — until last year — more space was filled than emptied. From 2015 to 2018, Colliers said, this gain equated to 1.5 million square feet of occupied retail space.
Colliers projects that what happened last year will be repeated this year because of announced store closures that include multiple locations of Pier 1, Forever 21 and Bed Bath &Beyond.
Colliers expects that Oahu’s retail vacancy rate will rise to around 6% by the end of this year.
