“Record-setting” warehousing-distribution, recovery for office buildings, “hope” for stores — CBRE knows how to write attention-grabbing headlines.
The good news has to do with more than real estate. It means jobs and investment. And business growth.
“Oklahoma City experiencing record-setting trends in its industrial sector,” one headline says.
“Oklahoma City office sector recovering as vacancy falls and absorption rises,” another one says.
And then there’s “2021 brings hope and economic normalcy for OKC retail.”
Pandemic or not, commercial property markets are in pretty good shape around here. Here are highlights from CBRE’s midyear reports on the office, industrial and retail sectors.
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Oklahoma City industrial space
• Between 2010 and 2020, Oklahoma City’s warehouse-distribution sector grew by 56% or 10,000 jobs, outpacing the state at 33% and nation at 21%.
• “E-commerce and on-demand delivery service accounts for $4.2 billion or 5.5% of total GDP for the Oklahoma City metro today.”
• Cannabis is still inhaling industrial space.
• More companies are turning to build-to-suit properties, which is driving demand up for industrial land.
• “The first half of 2021 brought a few challenges but overall great success to Oklahoma City’s industrial sector as vacancy continues to decrease and absorption, completions and construction continue to climb.”
• Industrial stats at midyear: Vacancy, 2.9%; net absorption, 533,000 square feet; annual average asking lease rate, $6.15 per square foot per year, triple-net (tenant pays for property insurance, property taxes, maintenance and utilities); under construction, 1,699,081 square feet; completed in the first half of the year, 193,811 square feet.
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Oklahoma City office space
• “The first half of 2021 brought a massive rebound in office leasing and sales, not to mention 141,838 square feet of absorption — the highest the city’s office sector has seen in recent years.”
• Asking lease rates slipped “as a lingering effect of the pandemic,” but vacancy fell and absorption increased.
• Building material costs shot up 25-45% “and transactions, tenant improvement and new construction timelines have faced significant delays.”
• “As the economy stabilizes and tenants become more comfortable, we can expect to see an increase in office leasing velocity and long-term leases.”
• Office stats at midyear: Vacancy, 17.4%; net absorption, 141,838 square feet; annual average asking lease rate, $18.03 per square foot per year; under construction, 150,722 square feet; completed in the first half, 205,022 square feet.
Story continues below.
Oklahoma City retail space
• Occupancy was holding steady at 92% and seeing positive absorption for the first time since before the coronavirus pandemic.
• “Restaurant and travel demand is surging faster than establishments can match with workers, bringing relief to a hard-hit corner of the labor market.”
• Hotels and motels had the biggest gains in construction.
• “Several major retailers have opened, expanded, or announced plans for development since January 2021.”
• Retail stats at midyear: Vacancy, 8%; net absorption, 306,698 square feet; annual average asking lease rate, $18.03 per square foot per year; under construction, 227,806 square feet; completed in the first half, 115,742 square feet.
You’re really doing pretty fine, Oklahoma.
Richard Mize has covered housing, construction, commercial real estate, and related topics for the newspaper and Oklahoman.com since 1999. Contact him at rmize@oklahoman.com.
