Slower economic conditions and higher vacancies in most of the
major commercial real estate property types did not keep investors
away from the Oklahoma City market in 2003. The strong amount of
commercial property transactions during the year showed that
investors remain confident in the local market despite current
Most local commercial brokers contend the reason for the
sustained strength in sales activity in 2003 was due largely as a
result of two primary factors. The first was the low cost of capital
that resulted from the historically low interest rates. Several
deals that transpired during the year may not have happened if
interest rates had not remained at such low levels. Furthermore,
because capital was so affordable, investors were able to spend more
allowing property values to remain strong despite a softer market.
The second factor was the number of investors who were seeking
commercial property as an alternative investment to the stock
market. The recent volatility of the stock market has sent investors
seeking for more stable holdings in other types of investments. As a
result, these investors are being attracted to the stable returns
that are available through commercial property investments.
In addition, local experts said Oklahoma City remains a prime
market for these investors due to the fact that property values in
the area are much more affordable than what is currently available
on both the East and West coasts of the country. Over the past few
years, Oklahoma City has seen a tremendous amount of West Coast
investors abandoning properties in their own back yards due to the
inflation in prices and instead acquiring apartment complexes in the
metro area due to their affordability.
However, local investors are still very much active in the
marketplace. The top transaction in terms of dollar amount was the
$21.9 million purchase of the Montclair Parc Apartments by Tulsa-
based Case and Associates Properties. Even with the influx of out-
of-state buyers, Case continued to stake its claim on Oklahoma
holdings with the acquisition of the 360-unit apartment complex. The
company remains the state's largest apartment owner with nearly
4,000 units of Class A and B properties in its portfolio.
Located at 10900 S. Pennsylvania Ave., the complex was
constructed in 1999 and was 89 percent occupied at the time of its
sale in September.
At a price of $60,833 per unit, William T. Forrest, first vice
president of CB Richard Ellis/Oklahoma said the reason Montclair
Parc drew the highest price paid thus far for a post-1990s vintage
apartment complex was largely due to low interest rates. In 2001,
both Prairie Springs and Sycamore Farms sold for around $55,000 per
Montclair Parc's higher price makes sense because the interest
rates are lower than they where when those other properties
transacted, explained Forrest, and there is a little more demand for
acquisition of properties like this than there was in 2001.
Oklahoma City's second-largest transaction in 2003 was also an
acquisition made by a group of local investors. The buyer group, led
by Roy T. Oliver, acquired the 300,000-square-foot The Tower office
building for approximately $20.8 million.
Constructed in 1983 and located at 1601 Northwest Expressway, the
22-story property is one of only a few Class A office buildings in
the entire Oklahoma City market.
The purchase of The Tower marks the fourth office building
purchased by Oliver's investment group in the past three years. In
2000, the group purchased Corporate Tower for $12.2 million,
followed by the purchase of One Benham Place in 2001 for $12.2
million. The investors also acquired the Grand Centre office
building in September 2002 for $8.2 million.
Despite its Class A status, the building has seen its occupancy
and rental rates drop as a result of the softening office market. …