The hit-and-miss economic recovery is hitting Oklahoma City industrial property.
What's going missing is the industrial property.
Industrial users sucked up space in the first quarter. Tenants took more than 600,000 square feet of space off the market and put it in use the first three months of the year, compared to 350,000 square feet in all of 2011, according to Independence, Mo.-based Xceligent Inc.
“This continued momentum has reduced the vacancy rate down to 8.3 percent, with concerns that (the city is) quickly running out of inventory,” reported Xceligent, a national online real estate data company that tracks Oklahoma City and other U.S. markets using data and analysis by local brokers.
Rising lease rates?
Xceligent's first-quarter industrial trends summary reported a vacancy of 4.5 percent in bulk warehouse buildings; 17.7 percent in warehouse-distribution centers; 7.2 percent in flex buildings; 6.2 percent in light industrial buildings — and zero vacancy in manufacturing facilities.
Across all categories, the average lease rate was $4.58 per square foot per year, Xceligent reported, “but OKC could be on the cusp of strong rental rate increases by landlords with some signs of this already in the southwest submarket.”
Energy-related companies were the main driver in the first quarter but weren't the only major users, said Brian Hunt, Xceligent's regional director for Oklahoma. Some brokers say speculative building could be ahead, he said.
For example, Quad Graphics leased 164,000 square feet in a 312,000-square-foot distribution warehouse at 6801 S Air Depot Blvd. Sussex, Wis.-based Quad Graphics uses the space for warehousing paper products and staging materials for its manufacturing and printing plant on Sunnylane Avenue, said broker Gerald L. Gamble, who negotiated the long-term lease.