HONOLULU -- The playing field is finally leveling out for office space in Honolulu.

"Rents are softening. We had a five percent drop in base rents which is good for tenants, but from a landlord perspective, they have to be a little bit more aggressive to retain their tenants and also trying to secure new tenants in their spaces," said Mike Hamasu, with Colliers Monroe Friedlander.

What is looming ahead is a possible hike in real property tax rates and rising utility costs which will be absorbed up by lessees.

Overall, things are looking up for those looking to upgrade or negotiate a better location or add space.

Hamasu said generally the commercial market tends to lag behind the retail and industrial snapshot.

"Principally, commercial real estate is a lagging indicator especially in the office market but the from a retail and industrial perspective it tends to be a coincidental indicator, so when the market and economy goes down the retail and industrial market heads south as well," Hamasu said.

"Everyone needs to be a little more flexible. We need to look at deals differently than we did a few years ago," said Donna Ferrel, Ward Centers general manager.

Such is the story as office vacancies are rising.

"On the office side we've had some success at leasing the IBM building with office pavilion and two new tenants on the fourth floor, as a result of IBM downsizing earlier in the year and we also have other leads it's a little more challenging than in years past," Ferrel said.

The office market tends to lag behind the retail and industrial trends.

At Ward Center there's been pressure to fill the void after losing long time retail stores and restaurants.

"We have been challenged a little bit by some vacancy but we have been effectively been able to find replacement tenants rather quickly for some of these spaces," Ferrel said.

Downstairs there is a new Jams World Shop and upstairs, Ka Restaurant replaces EO Trading Company and the center is filling out its list of new faces with Deuces Famous footwear, Wraps and Rolls and more.

"Keep the occupancy up that's been our strategy where can we go to keep the occupancy fresh tenants," Ferrel said.

The expectation is that once retail and industrial picture improves so will the office vacancy numbers.