Aggregate vacancy rate Aggregate rental rate
Oklahoma City Office Market
Source: Price Edwards & Co.
Oklahoma City office market
A report by Price Edwards & Co., a commercial real estate services
provider, said 2016 was a “historically bad year for the Oklahoma City
office market” and “you have to look hard for those silver linings”
in 2017. The overall office-space vacancy rate increased to 16. 5 percent
during the first half of 2017, and there was negative total absorption of
27,000 square feet. In the downtown core, however, there was some
positive news as Class A vacancy rates over the period dropped from
25. 7 percent to 20. 3 percent.
The energy sector is playing a large role in commercial real estate in
the city as Sandridge Energy subleased 143,000 square feet of downtown office space, while energy infrastructure company Williams shifted
its operations to Tulsa, leaving 120,000 square feet of space behind on
Oklahoma City’s north side, CBRE reported. There are some signs that
the oil and gas industry may be on the rebound in the state, however,
as an average of 134 rotary drilling rigs were active as of this past June,
a 127 percent year-over-year increase, CBRE reports.
What the locals say
“The energy industry clearly pulls a lot of weight. … The
companies that are here and have been for several decades
or generations are, I would say, right-sized. This is not their
first rodeo as far as a downcycle that we’ve gone through
recently relative to (energy) prices. If they were not right-sized, they are now, which has a little bit of an impact on
our office markets.”
By Neil Pierson
The energy sector fuels the Sooner State’s economy.
Oklahoma was part of the Louisiana Purchase in 1803, but it didn’t become
a state until more than a century later, when Congress in 1907 combined the
Oklahoma Territory and Indian Territory into the 47th state.
The Sooner State, Oklahoma’s nickname, was the scene of one of America’s
great migrations in the 1930s, when more than a million Oklahomans journeyed
to California to escape the Great Depression-era Dust Bowl. Oklahoma City, the
state’s capital and largest city, is at the center of the nation’s converging weather
patterns and averaged more than one tornado per year between 1890 and 2011,
including five in a single day in June 1974.
The historic Route 66 snakes southwest from neighboring Kansas, through
Tulsa, Oklahoma, and Oklahoma City, with several landmarks along the
way. There are two Route 66 museums in Oklahoma, in Clinton and Elk City.
The Arcadia Round Barn, built in 1898 and restored in 1992, claims to be the
most-photographed place on the route. Arcadia also is home to a 66-foot-tall
soda bottle at the POPS gas station and diner.
The state’s most famous location, however, might be the Oklahoma City National Memorial & Museum, which commemorates the April 1995 domestic terrorist
truck bombing of the Alfred P. Murrah Federal Building that killed 168 people.
Oklahoma’s unemployment rate is relatively low. It was almost on par with the
national rate of 4. 4 percent as of this past August and remained well below the
national rate during the Great Recession. A WalletHub study released this past
June, however, ranked Oklahoma as having the fifth-worst economy in the U.S.,
based on more than two dozen strength and performance factors.
State legislators weren’t able to reach a deal this past September to close an
estimated $215 million budget shortfall, which may negatively impact health
care for low-income residents. Oklahoma’s energy sector has lost steam in
the wake of an industrywide slowdown, and tax revenue from oil and gas
production has dropped off in recent years.
The state recorded a per-capita personal income of $42,692 in 2016, which
was 37th among all states and was 87 percent of the national average, U.S.
Department of Commerce data show. Oklahoma’s gross domestic product of
$182.6 billion last year ranked 29th among the states and represented a year-over-year decrease of 2.9 percent. n
President, Holliday American Mortgage, Tulsa