Newspaper article THE JOURNAL RECORD

Modest Improvement: Brokers Present More Cautious Forecast for Multifamily Properties in Oklahoma City

Newspaper article THE JOURNAL RECORD

Modest Improvement: Brokers Present More Cautious Forecast for Multifamily Properties in Oklahoma City

Article excerpt

Oklahoma City multifamily properties finished 2011 with their highest rental rate growth in two decades, according to the new year- end report by CB Richard Ellis of Oklahoma brokers William T. Forrest and Eva M. Wills.

Tulsa apartment operators managed less than 1-percent rent growth, according to that city's year-end report by CBRE multifamily brokers David Forrest and Brian J. Donahue.

"Even though overall rents posted a slight gain in 2011, today's average rental rates are still below the highs set at the end of 2008," the Tulsa duo wrote.

While they noted one exception, an increase for two-bedroom, one- bath units to average $597 a month, even that fell below the $606 average charted at mid-2011.

The reports both recorded minor increases in occupancy rates. Oklahoma City properties finished 2011 at 92 percent, their highest point since 2002, while Tulsa apartment operators averaged 91.5 percent, equal to the midyear 2011 level and up from 91 percent at year-end 2010.

Neither report anticipates significant occupancy changes for 2012. The Oklahoma City analysis foresees continued 92-percent overall, while the Tulsa report declines to guess.

"We expect more of what we have seen in the previous two years - slow improvement," wrote Forrest and Donahue.

Oklahoma City rent growth marked the one diversion from such conservative stands, and that remained limited to moderate rent growth averaging 3 percent.

These two reports present a more cautious outlook from more boisterous forecasts released over the last two weeks by Hendricks and Partners, Sperry Van Ness and other commercial real estate companies.

While all of these studies reflect the same general economic conditions - strong employment growth, limited competition from still-recovering housing sectors, increased multifamily construction fueled by continued consumer demand - David Forrest attributed the more cautious CBRE reports to a couple of factors:

* Using in-house surveys of local property owners rather than data gained from national property management companies.

* Drawing from more than two decades of personal experience and interaction with apartment managers and owners in both markets.

While that glosses over some factors - Commercial Realty Resources Co. maintains its own transaction database to more accurately track property values, for example, while Hendricks and Partners employs its own research staff to keep pace with each national market it serves - it does reflect the historical trends CBRE emphasizes in its market observations for what has been Oklahoma's hottest commercial real estate sector three years running.

David Forrest actually factors that historical approach into his Tulsa analysis, separating out newer apartment complexes so that their performance would not distort his overall database. …

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