CBRE: Honolulu offices are filling up

[urbanguy]

Many Honolulu employers, prospering in a strong economy, are hiring more employees and then moving to larger office space to accommodate them.

Honolulu office rents and building operating expenses are just now regaining the levels they reached in 1999, CB Richard Ellis Hawaii reports.

"As predicted, the asking rents are rising," CBRE Hawaii said Tuesday. "The increase is attributed to a tightening market."

The Metropolitan Honolulu gross average asking rent rate for office space is now $2.21 per square foot per month. Average office building operating expenses have risen to 87 cents per square foot per month, and 92 cents in downtown Honolulu. That last figure is the highest since 1997.

The rising cost of moving or expanding an office is greater for most companies than the rising rent. CBRE notes that construction costs are up 20 percent in one year. Most companies, when they move to new quarters, require a buildout in the new space, so construction costs figure importantly in the total cost of moving or expanding.

In the past five quarters occupancy has grown by more than 180,000 square feet and increases in building operating expenses and tenant improvement construction costs, said the CBRE Hawaii Office MarketView report for the first quarter.

There have lately been two unusual conditions worth mentioning: