Lenders in Hawaii are planning to do more commercial real estate lending this year, thanks to expanding local businesses and real estate investor activity[1]. In fact, many Hawaiian lenders like First Hawaiian and Hawaii National Bank “are seeing 2011 as the year for more aggressive lending in the market.”
The Hawaiian real estate market has seen a dramatic influx of foreign investors in the past few years as investors from countries like Canada, where the “canuck buck” is climbing in value, move in to take advantage of condos and homes that have fallen in price by as much as 60 percent[2]. As one Canadian reporter put it, “Why buy a cottage on a lake in Canada when you can be a on a beach with gardenia-scented breezes?” Some investors compare the Hawaiian market to the Florida one, saying that while Florida real estate – and climate – are attractive, “there’s hurricanes and 20 percent unemployment.” This has led buyers – and, subsequently, lenders – to predict that ultimately, the Hawaiian market will come back quicker.
As the residential market recovers, the commercial market is likely to follow. Do you think Hawaiian lenders are right that they are going to be doing a lot of commercial lending this year?
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[1] http://www.bizjournals.com/pacific/print-edition/2011/05/27/bankers-doing-more-commercial-re.html
[2] http://www.canada.com/Hawaiian+idyll+Canadians+finding+bargains+Aloha+State/4848121/story.html
Hawaii has local markets markets, too, with different activity levels on different islands & different climates depending on elevation and side of the island. But in general, Hawaii attracts a lot of entrepreneurs, both from other countries and from parts of our own, such as Alaska, and virtually unlimited possibilities for tourist services. Hawaii has a long way to go before it gets as schlocky as Florida, despite the similar draw (climate) for tourists. (It needs a Disney Island, a Sea World Honolulu, a Medieval Times, a Universal Studios, and a bunch of dinner shows other than luaus.)
For non-tourist activity, there’s great need to increase agriculture, ranching and the like despite the lack of peons–you need machines that can withstand lava hills, moist salt air and occasional earthquakes, after which you can hire the skilled labor necessary to fix those machines. Otherwise, you’re stuck with the current low-productivity family farms and ranches that don’t produce enough to stock the local supermarkets with local staples other than pineapples, coffee, and macadamia nuts. There’s also need for scholars to rescue native history and culture, which have been rendered unrecognizable by generations of meddling preachers and collaborating islanders. So yes, I’m bullish on Hawaii.
There’s no way to verify really if the banks will increase lending. Even if one subscribes to periodicals which publish newly formed businesses and their respective licenses. That alone doesn’t verify a closing it merely states someone started a new LLC or C or S corp. Big deal.