Honolulu retailers looking for space are finding it hard to get storefronts. Most available spaces are not in new buildings, and older spaces are disappearing due to demolitions and conversions. Retail availability in many neighborhoods is now very low.
CoStar Analysis Finds Pockets Near Zero
According to CoStar, roughly half of the metro area's 12 retail submarkets are reporting availability rates below 3%. Less than 1% of the space currently on the leasing market was built in the past five years. Since 2015, Honolulu has lost about 240,000 square feet of retail space due to demolitions and conversions. These trends make it unlikely that retail vacancies will increase soon.
Local Trackers Show Tight But Uneven Conditions
Colliers' Oʻahu retail report shows a mid single-digit vacancy rate across the island, with some empty storefronts visible. Stores like Macy’s at Windward Mall, Consolidated Theatres, and Longs Drugs have closed certain locations. Some areas have trouble filling spaces, while others are competitive for small storefronts. In most neighborhoods, landlords have the advantage.
Availability, Absorption And Asking Rents
CBRE's third quarter 2025 snapshot puts overall Hawaii retail availability at about 5.0% and records negative net absorption for the period. The firm reports average net asking rents at roughly $3.06 per square foot at the end of the quarter. Local coverage has echoed that data heavy view of the landscape, with Hawaiʻi Public Radio describing the market's recovery as fragile, a framing that helps explain why so little new space is coming online. Taken together, the numbers and the narrative point to limited new supply, not weak demand, as the primary force behind the squeeze.
Long-Term Projects Offer Relief, But Not Immediately
There are sizable developments in the pipeline, although they are years away from solving the crunch. The Howard Hughes expects Ward Village to ultimately deliver roughly one million square feet of retail space at full build out, but that new inventory is tied to phased residential towers and long construction timelines. The city has also picked a developer for the Iwilei warehouse redevelopment, which includes plans for ground floor retail. Those storefronts are not coming soon either, since the project still needs design work, approvals and construction. Timeline and developer details spell out just how extended that schedule could be, as per Hoodline.
What It Means For Tenants And Small Businesses
For tenants trying to secure a spot, this environment translates into longer site searches, fewer move in ready options and tougher competition for compact spaces in downtown and tourist heavy corridors. Colliers notes that new openings from larger chains have soaked up space in select pockets, without doing much to relieve the broader scarcity problem across the island. In the meantime, expect to see more subleases, pop up concepts and shared retail arrangements, while landlords gravitate toward stronger credit tenants and flexible lease terms to bridge the gap until those bigger projects finally open their doors.
