An anticipated rebound in commercial real estate sales in Hawaii didn’t arrive in 2011 as sales volume plunged 17.6 percent from the previous year, a new report shows.

Total volume fell to $1.22 billion last year from $1.48 billion in 2010, while the number of transactions declined to 136 from 157 because lenders were more flexible with loans that allowed owners to hold on to properties, according to a report released Thursday by Colliers International.

Large transactions in the third and fourth quarters of 2010 "unduly influenced our projection of how quickly Hawaii’s investment market would recover in 2011," the report said.

"The bottom line is that we were anticipating more major transactions to occur in 2011 as a result of the recession and distressed sales," said Mike Hamasu, Colliers director of consulting and research. "Let’s just say that the recovery has been spotty or uneven."

The two largest transactions last year occurred in the fourth quarter when Waikiki Galleria sold for $187 million and the Fairmont Orchid hotel on Hawaii island traded for $120.8 million.

Colliers expects the momentum to continue into 2012, with sales volumes projected to grow 15 to 20 percent over 2011 as financing gets easier, economic conditions improve and investors seek to diversify their portfolios.

"We’re projecting the market will improve at a steady pace over current levels and real estate will continue to be a viable option in comparison to alternative investments like treasuries, bank accounts or the stock market," Hamasu said.

Hawaii lagged behind the mainland trend in performance, he said.

Hotel and resort sales generated 37 percent of total sales volume last year, while hotel sales volume jumped nearly 73 percent from the previous year to $453 million — the healthiest gain among all property types — from $262 million.

Office space accounted for 19 percent of total volume and $236 million in sales, and retail space, 18 percent with $225 million in sales. The industrial market posted $183 million, or 15 percent of aggregate sales volume.

Local investors — representing roughly 72 percent of total sales — spent more than $409 million and bought properties on average for 25.7 percent below assessed values. The average purchase price among local investors was $4.4 million.

By comparison, out-of-state investors bought 43 properties for $825 million at an average purchase price of $19.2 million. Those buyers bought properties that were on average 22.3 percent above assessed values.

Roughly 45 percent of total sales volume, or more than $550 million, was for distressed properties that included a number of hotels statewide.