<p><strong><img src="/sites/default/files/files/Downtown%20OKC%20through%20Leaves.jpg" alt="Downtown Oklahoma City" title="Downtown Oklahoma City" width="450" height="262"></strong></p><p> </p><p><strong>Office</strong></p><p><img src="/sites/default/files/files/Cordell%20Brown%204x6.jpg" alt="Cordell Brown" title="Cordell Brown" width="100" height="150"></p><p>Cordell Brown, CCIM, CIPS | <em>Office Investment Specialist</em></p><p><strong>First Quarter Office Sales Reach $19 Million</strong></p><p>The 1st quarter of 2016 office market sales are off to good start. Three office sales in excess of 25,000 square feet changed hands. Total square footage was 173,874 and total sale price was $19,367,500 or $111.39 per square foot. The price per square foot was considerably higher than the 1st quarter of 2015 of $86.34 per square foot on a total of 172,333 square feet.</p><p>Buildings less than 25,000 square feet but larger than 3,000 square feet fared better in 2016 at an average of $133.42 per square foot compared to $109.09 in 2015. Total square footage of all general office buildings for 1st quarter 2016 was over three times as high at 350,884 square feet compared to 110,658 for the same time in 2015. Every purchase was a local user or local investor.</p><p>Five medical buildings changed hands in the 1st quarter of 2016. The total of 63,996 square feet brought $16,810,002 or $262.67 per square foot.</p><p>So far, the fallout from the drastic drop in oil prices has not seemed to have had an effect on the sale of office buildings. We all can read the paper and deduce that there will definitely be a change in the office market as a result of the turmoil in the energy sector. The leasing sector has seen the availability of space on the rise. At the end of the second quarter of 2016 we should start to see the impact on office buildings available for sale.</p><p> <img src="/sites/default/files/files/%21st%20Quarter%202016%20Office%20Sales_0.jpg" alt="2016 - Q1 Office Sales Summary" title="2016 - Q1 Office Sales Summary" width="975" height="884"></p><p> </p><p><strong><em>Retail</em></strong></p><p> <img src="/sites/default/files/files/paul%20phillip%20george_0.jpg" alt="Paul Ravencraft, Phillip Mazaheri, George Williams" title="Paul Ravencraft, Phillip Mazaheri, George Williams" width="311" height="150" style="color: #262d29; font-family: Arial, Helvetica, sans-serif; letter-spacing: 0.36000001430511475px;"></p><p>Paul Ravencraft, Phillip Mazaheri, and George Williams | <em>Retail Investment Specialists</em></p><p><strong>First Quarter Sees Pause in Retail Property Sales </strong></p><p>After the sale of 42 properties of over 25,000 square feet in the last two years, there were no such sales in the first quarter. We see this as a pause as capital remains available and qualified buyers are active in the market. Expect a few sizable deals in the 2nd quarter with more in the pipeline to be closed later in the year. Some of the pause can be attributed to uncertainty related to the the energy industry which still plays on outsized role in the local economy. Nonetheless, many signs of strength remain in the broader economy which is evident by the number of national and regional investors in the market. Currently we have more buyers than sellers as many current investors want to hold on to their returns and don't see good alternatives to invest sale proceeds. Normally, this would drive cap rates down and induce more sales, but with cap rates already at historic lows for our market, the current more cautious environment will test that relationship. A sign of the lingering strength of the retail market is current new construction, including larger developments like Chisholm Creek and Shops at Quail Springs, but also numerous 10-20,000 square foot strip centers. Leasing activity for these projects is good. This tension between pockets of uncertainty and pockets of strength will create opportunities in the marketplace and make for an interesting year. </p><p> </p><p><strong><em>Industrial</em></strong></p><p><img src="/sites/default/files/files/Mark%20Bob%20Danny%20Chris.jpg" alt="Danny Rivera, Mark Patton, Bob Puckett" title="Danny Rivera, Mark Patton, Bob Puckett" width="432" height="150"></p><p>Danny Rivera, Mark Patton, Bob Puckett, Chris Roberts | <em>Industrial Investment Specialists</em></p><p><strong>Industrial Market Sees Over $15 Million in First Quarter Sales</strong></p><p>The 1st quarter of 2016 is showing some life. Overall there were 22 industrial buildings sold containing 350,203 square feet for a total consideration of $15,931,000. The market-wide average price per square foot in the 1st quarter was $45.49, which is a 3% increase from the 4th quarter of 2015. With the amount of transactions declining from the last of 2015; the overall dollar volume followed as well and was off by 43% (4th QTR 2015). The main contributing factor is a decline in the number of buildings that sold over 30,000 SF. </p><p>All things considered, the Oklahoma City industrial real estate market seems to be cautiously optimistic. A contributing factor is the decreasing vacancy rate which shifted from 7% (4th QTR 2015) to 6.5%. Although leasing velocity lacks last year’s momentum due to product availability the low availabilities will continue to support the growth we have seen in rental rates and keep the industrial market competitive. </p><p> <img src="/sites/default/files/files/2016%201st%20Quarter%20Enitre%20Quarter%20Updated_2.jpg" alt="2016 - Q1 Industrial Sales Summary" title="2016 - Q1 Industrial Sales Summary" width="900" height="1099"></p><p> </p><p><em><strong>Multifamily</strong></em></p><p><img src="/sites/default/files/files/David%2520Dirkschneider%25201_1.jpg" alt="David Dirkschneider" title="David Dirkschneider" width="107" height="150"></p><p>David Dirkschneider | <em>Multifamily Investment Specialist </em></p><p><strong>Multifamily Sees Cautious First Quarter</strong></p><p>In the first quarter of 2016 the Oklahoma City multifamily market has been resting after the very active 2015. Historically speaking, the first quarter more often than not, has been a decent indicator of how the remainder of the year would be; however, there has been a number of years like 2015 where the first quarter came in like a lamb and the fourth went out like a lion with the first quarter of 2015 accounting for only 12% of the total year’s volume while the fourth included 39%. Compared to 2015’s first quarter the first quarter of 2016 is virtually identical with total volume, total units and average price per unit all within 4%. </p><p>Breaking down the number by class was a little easier this quarter as there was only one transaction that was not Class C, and it was a 256-unit property for $16,700,000 giving Class B an average price per unit of $65,234. There were a total of six transactions of Class C assets totaling $29,640,000, almost identical to the first quarter of 2015. The total units sold increased almost 5% to 915 giving the average price per unit of $32,393. </p><p>So how do we feel about the market going forward? Based on the numbers, the rest of the year is very hard to predict on these statistics alone, but when combined with the overall sentiment and the market activity it does appear that there is more caution than seen the past couple of years. There are still an abundance of buyers looking for deals but they are not moving as quickly and they are looking at properties much more cautiously. The overall economic situation has caused investors to feel the pulse prior to making an offer, and when done by multiple buyers it’s that hesitation that causes markets to feel a slowdown. We feel the market fundamentals are still good, and despite the drop in energy prices our local economy has continued to push forward adding jobs and diversifying. Thirty years ago when a similar energy crisis happened it caused a major catastrophe, but now most people are standing around waiting for something to happen, and finally realizing that we really are as diversified as we have claimed to be. Does this mean we are recession proof, or does it mean we can just hold out a little longer in hopes that oil prices rebound? Only time will tell. One thing is certain on the apartment side, as stated in our annual market report, construction activity will be the biggest factor that can impact our industry, not oil. No longer “if you build it they will come” strategy works, now developers are having to give incentives to new residents dropping their bottom line, which in turn drastically hurts their NOI and sales value. So going forward we look to see some creative management strategies to capitalize on a tight market. Class B and C properties should fare well on the operations side, but in select areas look to see Class A occupancies decline. Transaction activity will likely slow down as compared to 2015, but not as low as the 2008-2010 levels. We have advised any of our clients, if you have considered selling, now may be the last opportunity to take advantage of these historically high prices before the market does finally start to turn, because as any who has been in this industry long enough knows, it will eventually turn. </p><p> <img src="/sites/default/files/files/2016%201st%20Quarter%20Multifamily_0.jpg" alt="2016 - Q1 Multifamily Sales Summary" title="2016 - Q1 Multifamily Sales Summary" width="950" height="288"></p>
Price Edwards Releases Q1 2016 Sales Summary
Price Edwards Releases Q1 2016 Sales Summary
April 12th, 2016
Industrial, Investment, Multifamily, Office, Retail
