Oklahoma City office market loses some energy
Oklahoma City office market is being driven by oil and gas industry, but even changes at giants Chesapeake Energy Corp. and Devon Energy Corp. won't necessarily have much long-term negative impact, according to two local commercial realty firms.
However, despite strong demand, office vacancy across all classes increased slightly in the fourth quarter of last year, to 17.9 percent, “largely as a result of Chesapeake Energy's consolidation,” according to that report, prepared by research analyst Julie Anewalt and office broker Vicki Wells.
Price Edwards recorded a slight drop in vacancy, to 16.2 percent.
The difference has to do with different properties surveyed by each firm, but also is an indication of how stable the market has been despite changes at Chesapeake as well as at Devon Energy Corp., which now fully occupies its new 1.8-million-square-foot skyscraper at 333 W Sheridan.
“Despite 500,000 square feet of space hitting the market in 2012 from Devon's phased relocation to its new downtown corporate headquarters, the market seemed to just shrug that off with solid absorption of that vacancy and another strong performance by the northwest submarket where the overall vacancy rate is now under 10 percent,” Price Edwards said.
Class A buildings in the northwest are even tighter, with a vacancy of just 4.2 percent. Downtown, Class A vacancy fell from 8 percent to 4 percent at the end of 2012, even as space across classes opened up to 24.6 percent, the firm said.
Price Edwards cautioned of volatility in 2013 “due to the financial strength of local companies relocating to more modern facilities, but there is also the possibility of some companies reducing their space needs ... however, we see more positive than negative.”
Grubb & Ellis-Levy Beffort pointed to Oklahoma City's main economic engines, as well as the nature of the supply of office space, in its forecast for the year.
“Growth in the oil and gas industry will continue to be an economic driver through 2013 and the years ahead,” the firm said. “The combination of Oklahoma City's economic strength and large blocks of available office space will allow new companies to enter the market.”
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