The state is one step closer to buying a downtown Honolulu building that would put several state offices all under one roof.
The Senate Ways and Means committee approved Monday House Bill 1366, a proposal to buy Alii Place for $90 million.
The state says it could cost more than three times that amount to build new state offices from the ground up.
KHON2 dug deeper into the proposal and learned that about one third of the 25-story building is currently vacant.
Real estate analysts say there’s a reason for the vacancies: there’s a new type of office space that’s trending worldwide.
“Everybody’s doing it. Virtual office is the future,” said real estate analyst Stephany Sofos.
Hawaii’s office market has been struggling for over seven years, and Sofos says it’s going to continue to struggle. “It’s just not the business model for the future,” Sofos explained.
Instead of renting expensive office space, companies are choosing to have employees work from home. It’s a trend worldwide, and Sofos says big companies like IBM, Microsoft, Google and Apple are going virtual.
We’re also starting to see it in Hawaii.
“It’s just a lot more efficient because of your smart phones, your computers, your iPads, to be on the road and not be in an office,” said Sofos.
She predicts Hawaii will not see any new high-rise office space built in the future.
“The only people who have big offices are banks, the government, the government and government,” Sofos said.
But there is one office space flourishing from the rise in virtual offices, a local company called BoxJelly.
Based in Kakaako, BoxJelly is Hawaii’s first “shared work environment.” People who work from home can rent out working space and everything a traditional office has for however long you need it.
“Think of it like a gym membership,” explained BoxJelly office manager Britney Taamu-Miyashiro, “where your membership grants access to the space and all the amenities.”
Taamu-Miyashiro says they get a lot of working professionals in various industries using the space.
“It really brings in a flow of energy, whereas these empty office buildings are remaining stagnant,” she said.
The “virtual office” trend is also working in favor for coffee shops. Sofos says more professionals are working out of shops that offer Wi-Fi capabilities.
“They call it ‘coffices,'” said Sofos. “Because again, are you going to pay yourself a bonus, or are you going to pay for a glamorous office space?”
As for the Alii Place purchase, the proposal will now be heard in front of the full Senate.