Warehouse-distribution space for lease was tight even before the May tornadoes, and nearly four months later landlords and tenants are still in repair mode.
Roofing crews and displaced lessees still are common, especially in southwest Oklahoma City, which has most of the city's multitenant, investment-grade industrial property and bore the brunt of the May 31 tornado and storms.
An unknown number of industrial tenants had to move to previously vacant space, according to Price Edwards & Co. Relocations and the use of space by disaster relief agencies “combined to push the vacancy numbers to unprecedented lows,” the firm said in its midyear industrial market summary.
“Many of the displaced tenants will revert to their original space once repairs or rebuilding is completed and most if not all of the relief agencies will vacate their temporary space with time,” Price Edwards said.
In the meantime, the disaster has scrambled the statistics.
“Calculation of the long-term vacancy in multitenant industrial buildings is just not possible at this time. We publish this report with the acknowledgment that some vacancies were reported before the storms, and some after,” Price Edwards said. “In discussing the calculated vacancy, we will try to arrive at a likely range for long-term vacancy, essentially the vacancy after the emergency relocations return to their original facilities.
“Whether or not the actual numbers reported here are correct, the overreaching conclusion is that this market is at very low vacancies, and is likely to remain so for the foreseeable future.”
Recovery is similar to that in residential neighborhoods despite the huge roof sizes, which come in tens or hundreds of thousands of square feet.
“We're moving along, but these things take time, especially in the commercial arena where you have large buildings involved. It takes time to work through the insurance claims, and then it takes time to schedule the roofers because they're all very busy,” said Bob Puckett, industrial property broker with Price Edwards.
Bulk warehouse space, especially, was sucked up after the storms, he said.