BizLeaseCheck
Hawaii Commercial Lease Guide

Commercial Lease Guide for Hawaii

A practical, tenant-focused guide to reviewing Hawaii commercial leases — not legal advice.

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Key Lease Considerations

Hawaii leasing often comes with unique cost drivers: high utilities, shipping/logistics costs that show up in operating expenses, and (in some cases) leasehold or ground-lease structures.

This guide focuses on budgeting the true monthly number (including any taxes passed through on rent), tightening CAM definitions, and reducing exposure to unpredictable maintenance and insurance costs.

Major markets
Where we see the most leasing activity.
  • Honolulu (Oʻahu)
  • Kahului (Maui)
  • Kailua-Kona (Hawaiʻi Island)
  • Hilo
Common lease types
Typical structures and what to watch.
  • Retail: NNN or modified gross (tourist areas may include percentage rent)
  • Office: modified gross (utilities and after-hours HVAC)
  • Industrial: NNN (yard/drive areas, exterior maintenance, and insurance)
Cost drivers
Items that often create surprise bills.
  • High electricity and utility costs (submetering vs. allocation)
  • General Excise Tax (GET) pass-through treatment on rent and/or CAM
  • CAM scope (maintenance, landscaping, security, trash, and admin markups)
  • Insurance premiums and deductibles (windstorm/storm-related exposure varies by location)
  • Leasehold/ground lease terms if applicable (rent resets, pass-throughs, and approvals)

Negotiation checklist

Confirm taxes and how they’re billed
Ask whether rent is subject to GET pass-through and how it will be shown on invoices. Confirm whether taxes apply to CAM/other charges as well.
Utilities: submetering preferred
Given high utility costs, prefer submetering. If utilities are allocated, require a transparent formula and cap administrative add-ons.
CAM: define, budget, reconcile, audit
Require an annual CAM budget, reconciliation, and audit rights. Exclude capital replacements and landlord overhead that doesn’t directly benefit tenants.
Leasehold/ground lease due diligence
If the property is leasehold or involves a ground lease, understand term length, rent resets, approvals, and whether ground rent and related costs are passed through to you.
Repairs vs. replacements
Clarify roof/HVAC and exterior responsibilities. Negotiate caps or amortization for major replacement costs so you don’t inherit a building’s deferred maintenance.
Casualty and business interruption
Define what happens after a casualty event: rent abatement, restoration timelines, termination rights, and how insurance proceeds are used.
Assignment/sublease flexibility
Negotiate reasonable transfer rights. If you can’t assign or sublease, you’re locked into island-specific risk even if your business needs to pivot.

Official resources

Hawaii Business Registration Division — business searchHawaii Department of TaxationHawaii SBDC

Not legal advice. Always verify local requirements and consult qualified professionals for your situation.

Common Red Flags in Hawaii

Commercial real estate in Hawaii typically favors the landlord in standard lease drafts. Whether you are in Honolulu or elsewhere, you need to watch out for:

  • Uncapped NNN Charges: Variable costs like property taxes and insurance can skyrocket.
  • Broad Indemnification: Clauses that require you to pay for the landlord's negligence.
  • Relocation Clauses: Rights for the landlord to move your business to a worse location.
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Frequently Asked Questions

Is the Hawaii General Excise Tax (GET) charged on commercial rent?

Often, yes. Many landlords pass GET through to tenants. Confirm how it’s billed and whether it applies to CAM or other charges as well.

What’s the biggest Hawaii lease cost driver for tenants?

Utilities and operating costs. High electricity costs and broad CAM definitions can materially change your monthly number, especially in multi-tenant properties.

What is a ground lease / leasehold property and why does it matter?

Some Hawaii properties involve leasehold land arrangements. The economics can change due to rent resets and pass-throughs. If leasehold applies, understand term, rent escalation mechanics, and approvals.

Are NNN leases common in Hawaii?

Yes — many retail and industrial leases are structured with NNN/CAM pass-throughs. The key is documentation, exclusions for capital items, and limits on administrative markups.

Does BizLeaseCheck replace a Hawaii lease attorney?

No. It helps you spot common risks quickly and compare options, but it’s not legal advice. Use it as a starting point before professional review.