Downtown office vacancy tumbled the first half of the year, with tenants almost falling over themselves to lease space.
Price Edwards & Co.'s Mid-Year Office Market Summary was glowing: New lessees and expanding tenants occupied 240,000 square feet of space downtown since last summer.
That's more than in any other 12-month period since the firm started tracking office space in 1986, according to the report, prepared by Craig Tucker, managing broker and office specialist with Price Edwards.
It was as if Bank of Oklahoma Plaza, 16 stories at 201 Robert S. Kerr, went from empty to full — plus a whole floor of the One North Hudson building at 401 W Sheridan Ave.
“For downtown to have the absorption of 240,000 square feet the past 12 months is pretty staggering,” said Ford Price, managing partner of Price Edwards.
He said it's generated a new “dynamic” downtown, where the office market faces upheaval as Devon Energy Corp. occupies more and more of its 1.8-million-square-foot tower, vacating leased space in several buildings.
“People are feeling a lot better about being able to deal with Devon,” Price said.
The report does note in its forecast for the remainder of the year: “Vacancy rates will increase dramatically as Devon relocates to its new headquarters.”
Nonetheless, Price said, Continental Resources' absorption of the 307,000-square-foot former Devon headquarters building at 20 N Broadway, effective in early 2011, was a “game changer.”
The return of Enogex LLC's to downtown, leasing 130,000 square foot at Leadership Square, 211 N Robinson, also signified a turning point: Enogex, a natural gas pipeline subsidiary of OGE Energy Corp., had fled downtown as it was going down in the 1980s oil bust.
But the downtown office market is also thriving on “a whole lot of medium-sized transactions,” Price said.
Leasing activity remained strong at midyear, shaking off volatility in the industry sector fueling it: energy.