Hula Hoops

Harry Eager, a staff writer for the Maui News, asked an interesting question last week: "Is development of commercial space to dicey, pricey?" In the limited, in-demand space on Maui, the question fits (with not much space leftover).

In his review of a survey done by Colliers Monroe Friedlander, a commercial real estate broker, manager, and consultant, he states that labor shortages and delays in permits and government supervision process is heightening the risk of developing. A senior manager at the agency estimates that construction costs for a low-rise commercial building, the most popular on the island, are about $300 per square foot, not counting land.

MSN reported that increasing housing and energy costs in the Hawaiian islands are expected to drive local prices up 4.5% in 2007. Construction authorizations dropped in the first quarter of this year, however construction jobs increased due to development of existing permits.

Marty Kenny, the Collier's Maui broker, compared the commercial market in Maui to that of Manhattan, suggesting that mixed-use developments were the most viable option for the island. The mixed-use model (with retail on street level, and offices and/or residential space on the upper floors) would serve the 140,000 residents, and upwards of 40,000 tourists who visit Maui each day during the busy season.

Maui is the second largest island in Hawaii, at 727 square miles. Its main industries are tourism, agriculture (sugarcane and pineapple), and the high tech industry. The development of Maui's land, which is known for natural beauty and, is controversial. Between 1970 and 2005, the population of Maui has more than tripled, causing a strain on the island's infrastructure.

Sources: The Maui News, MSN Money