Big Distribution Coming to Maui
RD Olsen’s Maui Airport Industrial Center
Large-scale Class A distribution is finally finding it’s way back to Maui with the marketing launch of RD Olsen’s Maui Airport Industrial Center. As advertised by CBRE, the project’s broker, the 136,000 SF building will be leased out in smaller unit size options ranging from 15,000 SF to 118,000 SF. Ground breaking is anticipated for Q1 2024 with completion a year later.
The project offers what will be one of the island’s few moden Class A distribution centers with concrete tilt-up construction and 32’ clear height. The location, immediately adjacent to Kahului Airport’s freight cargo storage facility and few short miles to Kahului Harbor, is ideal from a logistic standpoint. The location also serves many of the ground transportation points feeding into Maui’s main submarkets.
The main question is who leases the project? Any given day you can see Maui’s big box retailers like Target, Lowe’s, Home Depot, Wal Mart and Costco, filled to the gills with 40’ shipping containers strewn throughout their parking lots. While only a short distance from this location, and literally down the street for the Costco, the facility could serve as first point delivery for unpacking, storage and re-distribution or just be used as oveflow storage. Cold storage is another option as pitched by CBRE insofar that the island has very little critical density outside of Sysco’s building in Kahului.
With so little distribution space available on Maui, RD Olsen’s project is likely to attract a lot of attention from local businesses already in the market and those interested expanding to Maui. The explosion of e-commerce activity since COVID is sure to find it’s way into the building as well. Amazon’s daily flights park a mere quarter mile away and utilize the airport’s freight cargo storage area for unloading their California inbound flights. Saving a step and directly utilizing such a building would invetibly cut down on labor and transportation costs for the company, along with allowing them to open new product channels for island-wide distribution.
With another island now adopting the trend, the modern era of Class A distribution centers has officially arrived in Hawaii. Kapolei in West Oahu has always been the home to the state’s largest warehouses given the abundance of space at cheap rents and proximity to Honolulu and Kalaeloa Harbors. As Kapolei grew over the years and started to officially take its place as Oahu’s “second city”, large distribution centers followed suit. A few notable recent and upcoming projects include Thomas Sorenson’s 226,800 SF Campbell Industrial Park warehouse built in 2019, Amazon’s $125mm Sand Island property with a multi-story facility delivering in April 2024, Costco’s 2022 44-acre parcel purchase for a West Oahu distribution Center site and the upcoming delivery of Kapolie Harborside Building 1, which will be the first phase of James Campbell Company’s push into large scale warehousing with a building size of 102K SF.
Distribution has clearly taken center stage nationwide and the movement is coming to Hawaii. Since Hawaii is much smaller and bifucrated than your typical US market where disitribution networks are laid out systematically with rail, ocean and ground transport connecting marjor logistics hubs, the Hawaiian network will inevitably come together differently. So far Oahu is not suprisingly shaping up to the be the central hub with the likes of Amazon, Costco and Home Depot setting up large-scale storage / e-commerce facilities. The outer islands like Maui are coming together as distribution outposts. Whether these outposts will fill in as single-location feeders from Oahu and the mainland or develop into the form of more intricate local distribution networks, we’ll soon see things come together as logistics technologies improve and cost-saving efficiencies develop to service these markets.