OKC Office Vacancy

[mugofbeer]

There are only a few cities where office vacancies are down since covid and apart from San Diego, it's all the recent boom towns like Austin and Nashville.

[jn1780]

There are certainly smarter ways to do it. Hybrid is the best way to go, where workers share a common space a few days each week. You don't need a cubical for every worker in your organization that's just a waste of space. Collaborative office space design will need more modern Class A space.

[Pete]

^

When I was in management consulting -- a business where most staff are working at the client's site but occasionally back in the home office -- we did "hotelling" which meant you were just assigned an open desk when needed. Most of the big accounting firms worked the same way.

It's really a smart way to operate, especially now that almost everyone has a laptop and cell phone, so all you need is WIFI access and a place to sit.

[Just the facts]

^

OKC has several cranes in our downtown area and we are less than half the size of Tampa/St. Pete.

yes, but theirs are all for high-rises.

[gjl]

My wife's company had 3 floors in one of the Landmark Towers pre-covid and abandoned all 3 floors with no plans of ever returning there. The few people who couldn't work from home were all moved to other existing office space at another location. Everyone else is still WFH. Which by the way she always said the building she was in was not very nice and seemed to always have problems. Plumbing, heat and air, elevators...

[G.Walker]

The downtown core has seen several Class A office projects either announced or under construction in the last couple years:

1) Convergence (230,000 sqft)
2) Citizen (160,000 sqft)
3) CoreBank (100,000+ sqft)
4) Phillips Murrah (80,000 sqft)
5) Pivot Office Building (48,000 sqft)
6) OSB office Building (45,000 sqft)

That's over 660,000 sqft of new Class A office space. That's enough space to fill a 25+ office tower. The point is that these companies could of easily back filled and subleased office space in the downtown core, but they wanted their own building.

[bombermwc]

There are only a few cities where office vacancies are down since covid and apart from San Diego, it's all the recent boom towns like Austin and Nashville.

That is incorrect.

There are markets all over where this is happening.

Chicago, the newest and best spaces are doing well. Everything else is sort of piddling along. If your building hasn't renovated recently, you're not filling it.

Detroit, you're looking at single digits outside of downtown. Oddly enough, people are looking more to move downtown. Former corporate burbs like Southfield are ghost towns. Single digit occupancy folks. THese are places that were spilling over with employees where you couldn't get any parking before COVID. And this isn't ghetto Detroit, this is high end where there are multi million dollar estates in Highland Park, just around the corner.

Dallas, well if you haven't already migrated north to Plano, then you're at home.

Want something more like OKC, go to Salt Lake. All those massive call centers are empty. Millions upon millions of square feet that will never fill up again. And those new buildings that were under construction during covid, well they're empty too.

So don't tell me that the markets of these places all over the country are not like it is here. I've been to too many of these places and seem them with my own eyes. And i think you missed one of my main points i've been making. We're not done with this trend yet. The reason is that those 10 year leases people signed, well early termination clauses are coming up and companies are exercising them. They've had to keep paying the leases (even if they "went dark" to put things below the line) because they couldn't get out of them. But as the option to get out comes up, you better bet your bippy that they are. And if not fully, then they are massively reducing what they had.

[Just the facts]

It will be interesting, my employer recently ordered everyone back to the office 2 days a week with the promise that a 3rd day will come by the end of the year. However, we have hired a significant number of people during work from home and there isn't enough room in our current building. Our lease is up next year and we have been told we are moving to a new office building with more space.

Meanwhile, my wife's employer has a large suburban campus and started leasing their unused space to other companies, so even if they did want to bring their employees back to the office there is nothing to bring them back to. Her company once had 10,000 employees on-site and now they now only have about 250 on-site. Everyone else works remote.

[warreng88]

I assume the vacancy rates don't include 101 Broadway (former BancFirst building) and 100 Park Avenue since they were purchased by Gardner Tannenbaum to be renovated into residential?

https://www.okctalk.com/content.php?...nts-and-retail

[Pete]

I assume the vacancy rates don't include 101 Broadway (former BancFirst building) and 100 Park Avenue since they were purchased by Gardner Tannenbaum to be renovated into residential?

https://www.okctalk.com/content.php?...nts-and-retail

Correct, those are now off the market.

[Just the facts]

While there isn't an official definition for office building class I wonder if the OKC real estate market has building classified as A locally that shouldn't be, or at least wouldn't be if located in another city. For example, Oklahoma Tower is a local Class A building and is pretty well maintained but it is 41 years old. It would take a pretty iconic building to be 40 years old and still considered Class A in many cities. My point is that newer buildings listed earlier will be the new Class A's even if they are smaller and several of current older class A will eventually drop to Bs.

[Dr Beard Face]

I'm working in Arvest Tower and they have a cool post covid option for people wanting easy and flexible work locations. The Executive Suites on 2nd floor are 28 individual offices with shared common areas, conference rooms, coffee bar/ kitchen, and WIFI. They even lease furniture so you can move in with just a laptop! They just finished building it last month so it's all nice and new. The rents are low, especially when you can have a personal office for around $500! I think the most expensive is like $1500. Lease options are nice too 1, 3, 6, or 12 month terms. I can easily see this type of office becoming a more common approach in a post covid office world. It seems like it just really stretches that rent dollar for smaller businesses.

[Just the facts]

Funny you mention that because I was just looking at that very thing. There has always been places like Regus and Office Suites Plus but it seems it is an easy market to enter with so much spaces available.

[Pete]

While there isn't an official definition for office building class I wonder if the OKC real estate market has building classified as A locally that shouldn't be, or at least wouldn't be if located in another city. For example, Oklahoma Tower is a local Class A building and is pretty well maintained but it is 41 years old. It would take a pretty iconic building to be 40 years old and still considered Class A in many cities. My point is that newer buildings listed earlier will be the new Class A's even if they are smaller and several of current older class A will eventually drop to Bs.

40-50 years is not that old in terms of a high-rise office building. OK Tower has modern floorplates, few columns, etc. And the lobby has been substantially updated. Should Leadership Square not be Class A? It's only slightly newer and has received zero updating since the early 80s (I know because my company was the very first tenant to move in).

These buildings would be Class A in any market. That doesn't mean that some Class A buildings don't charge more than others.

[G.Walker]

There is more momentum now for office development, then it was before COVID. Never seen so many office projects going on at once in the core.

[Just the facts]

40-50 years is not that old in terms of a high-rise office building. OK Tower has modern floorplates, few columns, etc. And the lobby has been substantially updated. Should Leadership Square not be Class A?

As you are well aware, building class is relative to the inventory around it. Oklahoma Tower and Leadership Sq are among the nicest buildings in OKC so....Class A. If Devon wasn't owner occupied then who knows.

[Pete]

^

BOK is newer than Devon and is physically connected to the entire Devon complex and that hasn't changed the ratings of downtown buildings.

[Just the facts]

You are comparing BOK to Devon Tower?

[Pete]

You are comparing BOK to Devon Tower?

Yes. It's almost exactly the same and is part of the entire project.

[OkiePoke]

What options are there for those exec style offices? I know a couple were listed, but I assume there are quite a bit more to choose from. Anything up on Memorial?

[Soonerinfiniti]

There is a multi-story building behind Chili's at Lake Hefner Parkway/Memorial that used to lease executive style offices. There is one in Edmond CBD (14 West Edwards) and in Fairview Office Park (1429 NW 150th - new building, very nice) as well.

[Just the facts]

Pete, we might just have to disagree over a hypothetical situation since Devon is owner-occupied, and that is okay.

Do you know if there is a list of Class A, B, and C office buildings? It would be interesting to see what falls into B. Loopnet uses a Star rating and BOK is the only 5 Star in OKC. Leadership Sq and Oklahoma are 4 Star.

[T. Jamison]

Price Edwards and Company have office market surveys that are summarized by Class A, B, and C. However, they do not specify which properties are A, B, and C. But, you could figure it out with some math and time.

[Pete]

Pete, we might just have to disagree over a hypothetical situation since Devon is owner-occupied, and that is okay.

Do you know if there is a list of Class A, B, and C office buildings? It would be interesting to see what falls into B. Loopnet uses a Star rating and BOK is the only 5 Star in OKC. Leadership Sq and Oklahoma are 4 Star.

I'm not going to do more work so you can then take whatever I post and twist it into yet another inane argument.

[PhiAlpha]

What us the % occupied at the Dowell building downtown?

lol