“It's a different world. It's a different oil boom. It's based on different capitalization,” he said.
The money behind current oil and gas exploration and development comes mostly from publicly traded companies “accessing traditional securitized capital markets such as stocks, bonds and corporate debt facilities,” Puckett said. “This stands in marked contrast to the oil boom of the 1980s, which was rife with small-investor drilling funds and short-term, high-interest bank debt.”
That means more stable cash flow through well operators today, and a more stable business environment for the oil-field service companies that occupy industrial space, he said.
Price Edwards tracked little change in the other two categories of industrial space it follows.
• Flex space vacancy declined from 12.9 percent to 11 percent since midyear 2011 and has hovered at 10-13 percent since 2006. Flex space is suitable for a mix of office, warehouse, lab and showroom areas and generally has ceiling height of 18 feet or less, but includes some newer properties with higher ceilings if they are marketed as flex space.
Most flex space in Oklahoma City was built in the 1980s and “suffers from low parking ratios, low (ceiling) clear-heights and limited truck access,” Price Edwards reported. “Given the consistency of the vacancy over time, we now consider 10 percent to be pro-forma vacancy for these older developments.”
• Service warehouse space vacancy rose from 8.8 percent to 9.5 percent, but accounts for the least amount of industrial space here. The decrease was the result of just 1,500 square feet going dark, the firm reported.
On the north side, most bulk warehouse leases are for $3 per square foot per year; most flex space leases for $6; and most service warehouses lease for $4.
In southwest Oklahoma City: most bulk warehouse leases are for $3.50; most flex leases are $4.75; and most service leases are for $3.50.
In southeast Oklahoma City, most bulk warehouses leases are for $4.95; and most flex leases are for $5; there is no service warehouse space.
• Vacancy: continued decline over the next year.
• Rents: continued rise back to pre-recession levels. Construction: some, moderate.
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Price Edwards & Co.'s 2012 Mid-Year Industrial Market Summary, with vacancy rates and asking rent rates for individual industrial buildings for lease, is available free (but registration required) at www.priceedwards.com.