If you liked 1988, then you're bound to like
1989 because there is little change expected on the forefront,
according to a concensus of Oklahoma City's commercial real estate
Brokers and leasing agents drew a collective sigh when asked
their projections for the vacancy rate, hovering around 27 percent
in metropolitan area offices. No dramatic variation is expected to
occur. But, stabilization is better than a decline in occupancy,
Jim Austin, head of the Oklahoma City office of Coldwell Banker
Commercial Real Estate Services predicted that "Class A" (newer, or
better built) space would continue to show "some" improvement in
"Class B and C" leasing activity will conversly grow weaker and
weaker, he said. But the feverish trend of moves to better quality
accomodations is expected to slow down.
Architects and builders are focusing their sights out of state
for development activity, or they are concentrating on projects of a
lesser scope locally.
Dave Benham, a principal in the Benham Group, architects and
engineers said that the firm's specialty thrust prompts it to react
"to the national circumstance" more than the Oklahoma building
That won't change in 1989. What contracts for building are
available will be associated with the expansion of Tinker Air Force
Base as it gears up to accomodate the E6-A and the B-1 Stealth
But Benham projected that national companies which "are
concerned with getting their facilities in place to compete" will be
investigating Oklahoma and Oklahoma City which offers low-cost,
quality living and an affordable labor market. That in turn could
generate building. The prospect is an aloof prospect though, and
nothing points to such an event in the new year.
TAP, the Architectural Partnership, consisting of John Ward and
Anthony McDermid is a small firm aiming to become a mid-sized firm,
but that objective requires out-of-state business and design work,
the pair said.
"I think the (commercial real estate) market has found the floor
where it is sitting though," said McDermid.
Until an upturn results, however, renovation and remodeling
projects will be about all there is to fill the plate of local
construction, they said.
A bright spot on the horizon is the industrial and
office/warehouse sector. Leasing improved throughout 1988 and the
forecast for continued good health is expected in 1989.
If any major building project is launched, it would likely be a
build-to-suit endeavor rather than a speculative venture. And those
in the know are betting that it will be a warehouse, or warehouse
complex, capable of providing large contiguous space to a particular
company, since nothing of great magnitude is available in the
Acquisitions of major properties numbered in the teens during
1988, with most of the purchases being made by out-of-state
investors. But if 1989 differs from 1988 to any degree, it is
expected to be in the area of sales.
In most cases, however, the ideal of investors will reflect that
of the past year - retention of ownership until the economy improves
and a profitable resale can be made. It's the old theory of "buy
low and sell high."
Property sales have included all types - hotels, motels,
apartments and major office buildings - as the climate of stagnation
in the brokerage community improved in 1988, but only in one or two
instances were revenues from leases expected to yield a short-term
return on investments.
A caveat to increased sales is the difficulty of obtaining
"It takes a great deal of cash," said Harrison Levy, president
of the brokerage company that bears his name.
"Financing is available for the right deal, but it depends on
the borrower," he said. …