Industrial Vacancies Continue to Decline

Article excerpt

By Darrell Morrow

Feature Editor

Oklahoma City's industrial building vacancy rate continued its shrinking trend during second quarter 1992. It dipped to 9.78 percent from 10.8 percent the first quarter, said Jim Austin, managing officer of CB Commercial Real Estate Group Inc., which does quarterly surveys of the availability of marketable industrial space.

The industrial vacancy rate has reached a low enough level that sales and rental prices likely will increase and new construction is expected to rise. Rental rates are predicted to increase 10 percent by year's end.

About 6.4 million square feet remained vacant at the end of the second quarter June 30. Cumulative absorption for the first two quarters was 1.4 million square feet, with 915,827 square feet of that occuring in the second quarter, Austin said.

Annualized 1992 absorption of vacant industrial space was estimated at 2.8 million square feet based on the present trend.

The CB Commercial survey analyzed 1,266 firms. It considers all vacancies of more than 10,000 square feet. It estimated the base square footage of Oklahoma City's industrial space at 65.52 million.

"Of the 900,000 square feet absorbed in the second quarter, much of the activity was in large facilities such as 96,000 square feet leased by API, a new manufacturer to the city, and the purchase of a 138,000-squareot American Trailers facility by a local manufacturer. Yellow Freight completed its purchase of the Mistletoe Express terminal which contains 145,000 square feet," Austin said.

Most of the larger industrial buildings remaining vacant have limited usage due to their specialized construction for past uses, said Bob Puckett, industrial properties associate for CB Commercial.

"We have two dynamics working the market right now. There is relatively little quality product out there across the board, and so it is forcing companies to be more flexible on how they use space. The second thing is that within some specialty markets, such as dockgh bulk storage space, there is a real tangible shortage of space," Puckett said.

"You can say, for instance, within the 90,000-squareot category there are a couple of spaces out there _ and that is all there are, just a couple. When we deal with out-ofwn clients coming in from the west coast, they are used to having 25 to 30 options. They are quite uncomfortable having only two options in the market. That has been hurting us," he said.

"Also, a lot of these companies are looking for really first class, high image landscaped industrial facilities located in highage industrial parks. We have practically none of those spaces available right now. …