In the midst of a sluggish national recovery, the Oklahoma City industrial multi-tenant market continues a slow steady rebound.
The last twelve months have seen increasing leasing activity, some stabilization of lease rates, and some significant portfolio sales. Overall the multi-tenant market reports a vacancy rate of 16.4%, down from 19.8% mid-year 2010. This is still significantly higher than the total Oklahoma City industrial market vacancy rate of 9.6%.
Once again the multi-tenant market, which contains a high number of national industrial tenants, is more reflective of the national economy than local trends. There was an important sale of a multi-tenant service warehouse facility to a user, 1101 S.E. 59th St., which removed 440,000 square feet of total space and 300,000 square feet of vacancy from the calculations. Factoring this space into the current vacancy still results in net positive absorption form midyear 2010, most of which occurred in the bulk warehouse market.
The Flex space market increased in vacancy from 10.2% in 2010 to 12.9% in 2011. The majority of this increase occurred in the Southeast submarket which went from 7.9% last year to 19% in 2011. A significant amount of flex space vacancy over last year can be attributed to the departure of out-of-town roofing companies which converged on Oklahoma City following the May 2010 hail storm.
The bulk warehouse market, with the highest concentration of national tenants, absorbed a net positive 113,000 square feet of space to post a current vacancy of 20.4%, down from 23.3% last year. These gains were more or less distributed evenly across the market. This positive absorption is perhaps the best news for the multi-tenant market as it reflects recovery, albeit slow, among national and regional industrial companies.
Service Warehouse space enjoyed market-wide absorption, even factoring out the before mentioned sale. Service Warehouse is the smallest and most volatile of the multi-tenant property types. The very few modern service warehouse facilities maintain high and consistent occupancy, while the older, more functionally obsolete buildings are more subject to market swings and short-term leases.
The Price Edwards & Company 2011 Mid-Year OKC Industrial Market Summary can downloaded here
