2021 was a boom year for local commercial real estate

While last year was a difficult one for many local businesses, there was one part of the local economy that boomed — Hawaiʻi’s commercial real estate sector.

According to an investment report from Colliers International Hawaiʻi, commercial real estate sales had a blistering 2021 in terms of the number of transactions and the amounts invested.

There were 353 such investments last year, the highest number in 16 years. Total sales of $3.15 billion even exceeded 2019’s pre-pandemic levels.

Who is buying all these properties?

For the second year in a row, Hawaiʻi-based investors were the most active, accounting for more than half the value.

And U.S. domestic investors were back, accounting for nearly the same amount. That’s a fairly dramatic return of Mainland money, which, in 2020 invested less than half a billion dollars in Hawaiʻi commercial real estate.

Still largely absent from the market were foreign investors, hampered by pandemic-related travel restrictions and mandatory quarantine rules. Just 2% of last year’s sales volume came from foreign investors.

In the mix were a few megadeals, such as BlackSand Capital’s acquisition of Royal Lahaina Resort and the Waikiki Galleria Tower for a combined $700 million. These were the highest priced purchases by a Hawaiʻi-based firm last year, according to Colliers.

The brokerage expects a surge in investment through the first half of this year, as low interest rates and rising inflation motivates fixed-income investors to pursue real estate.

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