Every market has a cost structure that investors learn to model. What distinguishes a well-run market is whether its institutions respond when a cost becomes a problem.
On that measure, Hawaii has been notably active. Over the past two years, the state has moved on insurance, on energy, and on long-term planning for the coastline, and each of those directly affects what it costs to own and operate real estate in the islands.
“The state has stepped in and reacted,” says Mark D. Bratton, CCIM, of The Bratton Team. “They’re taking care of us.”
Insurance for condominium owners
The clearest example is condominium insurance. A tightening market saw several carriers reduce their presence, leaving fewer choices for condominium associations and pushing premiums up.
The state responded with a program that extends the reach of the Hawaii Hurricane Relief Fund, originally created after Hurricane Iniki, to insure condominium associations directly. It is funded from money already accumulated in that fund, so it does not draw on taxpayers, and it began serving associations in 2025. Alongside it, low-cost state loans help associations upgrade plumbing and install fire sprinklers, improvements that reduce what buildings pay to insure.
Bratton has seen the effect in practice, including an association whose policy came in tens of thousands of dollars below the commercial alternative. “It’s easier to get insurance for condominiums than it was a year ago,” he says.
For owners more broadly, his own approach is worth adopting. His team rebids its insurance every year with two or three carriers, and watches reproduction cost closely, since construction costs have risen and coverage needs to reflect what it would actually cost to rebuild.
A second energy source
Electricity is the operating cost Bratton watches most closely, because it reaches every building type, from homes to offices, shopping centers and restaurants. Much of Hawaii’s power is generated from imported fuel, which makes a second energy source a meaningful opportunity.
The state is pursuing an alternative. JERA, Japan’s largest power producer, has proposed a roughly 500-megawatt power plant on Oahu, fueled by liquefied natural gas imported to an offshore terminal at Kalaeloa, at a cost of about $2 billion. The company has said the project could supply around a third of the island’s power and plans a formal application in early 2027. The proposal remains under regulatory review and is the subject of active public debate, including over how it fits the state’s long-term renewable energy goals.
Bratton’s interest, as a real estate advisor, is in competition and reliability. “It would sure be nice to have a second source,” he says, describing the potential for a more competitive power market and steadier supply. For owners, either outcome would bring down one of the most significant line items in the operating statement.
Planning ahead on the coastline
The third area is longer term, and it predates the recent storms.
Bratton points out that the state moved some years ago to push new coastal construction further back from the shoreline, drawing on University of Hawaii research into sea level rise. New projects now have to sit further back than they once did.
“They could see it coming,” Bratton says. “So we can plan for it over the next decades.”
For investors, that matters in two ways. New coastal development is being built to a more resilient standard, and the rules are known in advance rather than imposed after an event. Owners can plan acquisitions and improvements around clear parameters.
What it means for investors
The practical takeaway is that Hawaii’s institutions are actively working on the factors that shape ownership costs, and doing so in the open.
A buyer underwriting a Hawaii asset today can see a functioning insurance backstop for condominiums, a credible second energy source under review, and coastal rules designed for the long term. Each reduces uncertainty, and reduced uncertainty is what lets an investor commit capital with confidence.
Bratton’s broader message is that a market should be judged by how it handles its challenges as much as by the challenges themselves. On that basis, Hawaii is giving investors reasons for confidence. Current Hawaii commercial inventory and recently closed transactions show where that confidence is being put to work.
About the Expert
Mark D. Bratton (R), CCIM, leads The Bratton Team at Colliers International Hawaii in Honolulu, specializing in hotel, resort, and commercial investment sales.
The Bratton Team is a Hawaii commercial real estate and investment sales group, exclusively contracted to Colliers International HI, LLC. Led by Mark D. Bratton (R) CCIM and Mike Perkins (S), the team has advised buyers and sellers across all Hawaii asset classes for 40 years.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
