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Wednesday, October 10, 2007


ONCE RELUCTANT, RETAILERS NOW RUSH TO HAWAII 

Once Reluctant, Retailers Now Rush to Hawaii - New York Times



Many people are surprised to hear how expensive it is to do business in Hawaii. The state's economy has never prospered and has relied too much on tourism. There is now hope for the state when it comes to retail and commercial real estate development.

Hawaii now has some 30 million square feet of retail development. Another 4.5 million square feet is either planned or already under construction statewide. Oahu, the most heavily populated island, accounts for only about half of that development, or some 2.3 million square feet.


For years, large mainland-based retailers tended to steer clear of the islands that make up the state of Hawaii because of the extremely high costs of buying land and shipping goods, as well as a tight supply of construction workers and retail employees.

But in the last four years, a wave of retail development has washed over Hawaii, as the state has experienced a post-2001 rebound in tourism and growing optimism among residents, as job growth has been strong and home prices in many areas have roughly doubled since 2003.

As a result, they say, while Hawaii already had a number of familiar big-box retail chains like Best Buy, Wal-Mart, Costco and Home Depot, it has recently drawn attention from several national retailers trying to enter the market for the first time.

“National retailers have seen many of their competitors who have entered the market do the highest numbers of any of their stores, and that has changed their thinking,” said Molly Mosher-Cates, the principal broker and owner of the Sperry Van Ness/MC Realty Advisors office in Kailua, a mostly residential town on the eastern side of Oahu.



The newcomers to Hawaii include Target, which plans to open two large stores by 2009; Nordstrom, which plans to open a larger-than-average store in Honolulu next spring; and Whole Foods, which plans to open four stores in Hawaii in the next three years, although plans for its first store, on Oahu, were stalled by the discovery of an ancient Hawaiian burial ground on the site.

Walgreens plans eventually to open 25 to 30 stores in Hawaii as part of its effort to compete with Longs Drugs, the dominant drugstore in the state. At Petco, the San Diego-based pet products retailer, a spokesman said his company was also looking for possible store sites in Hawaii.

Mike Y. Hamasu, the consulting and research director for the Honolulu office of Colliers Monroe Friedlander, a large real estate brokerage firm, estimated Hawaii now has some 30 million square feet of retail development. Another 4.5 million square feet is either planned or already under construction statewide. Oahu, the most heavily populated island, accounts for only about half of that development, or some 2.3 million square feet.




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