Newspaper article THE JOURNAL RECORD

Oklahoma City Office Market Shows Signs of Improvement

Newspaper article THE JOURNAL RECORD

Oklahoma City Office Market Shows Signs of Improvement

Article excerpt

Despite a slight increase in overall vacancy during the first six months of the year, Oklahoma City's office market is starting to show signs of improvement, a midyear report said on Monday.

According to the Oklahoma City Office Market Summary Mid-Year 2003 report produced by Price Edwards & Company, overall vacancy increased to 20.8 percent during the first half of 2003, up from 20.4 percent at the end of 2002.

The increase in vacancy was solely concentrated in the downtown submarket which experienced a 1 percent rise in vacancy to 28.6 percent. In the suburban submarket, the vacancy rate remained unchanged from the end of 2002 at 16.3 percent.

We took our hits in the office market like any other city, said Craig Tucker, managing broker for Price Edwards. Fortunately, over the past two to three years, we were not hit as hard as a lot of cities were.

The report noted that the key factor signaling an improving market was the decrease in Class A suburban office vacancy. During the first half of 2003, Class A space in the Northwest submarket experienced approximately 95,000 square feet of absorption dropping the Northwest vacancy from 36.3 percent at the beginning of the year to 30.4 percent.

Positive absorption in Class A space in the North submarket also aided in dropping the North's vacancy from 31.4 percent to 26.3 percent.

Tucker explained that much of the market's overall vacancy increase was largely due to Class A tenants such as Hertz and Fleming vacating 300,000 square feet of space in the suburbs.

As evidenced by our survey, we knocked five points off that Class A vacancy rate, so I think that is an excellent signal that we are turning things around, added Tucker.

Because Class A rental rates drive the remainder of the market, Tucker anticipates rental rates will improve in all class of office space over the next few months as Class A rates continue to improve.

I feel good about where the Class A market is heading right now, noted Tucker. …

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