OKC Office Vacancy

[Pete]

I took these numbers from a survey that was done almost a year ago, and they have probably improved since then.

I took a guess at the building class, although I know the vacancy rates for each class is right because they tie out to the survey (which doesn't specifically identify which buildings fit into which category).

Some interesting observations:

1. Class A space inventory is tight; less than 15% available and no large contiguous blocks
2. Almost half the entire vacant space in the CBD is from the First National Center, which is Class C space in it's current form
3. If that space was converted to housing or leased, downtown vacancy would be under 15% overall -- very low
4. Vacancy rates have been trending steadily downward for five years and rents have been going up accordingly

[Pete]

If Devon was to build a building of it's own, here's some more numbers to ponder:

• They presently occupy 37 floors in 4 separate buildings
• Approximate total square footage is about 750,000
• A 50-story building would be right around 1,000,000 sq. ft.

[Pete]

Funny I posted this just hours before the Devon Tower announcement.

[bombermwc]

I think it will be great being class A. With such a large volume, they should be able to lower the price some and attract some folks that maybe wouldnt have moved downtown before.

[Midtowner]

The biggest impediment to the Class C space is that parking costs the same as if you were renting Class A.

And someone needs to do something with the Dowell Center.

[Pete]

Dowell Center received a big grant to remove asbestos which I believe they completed last year. The owner they said they were planning to slowly remodel the whole interior, floor by floor.

However, as far as I know, the building is still completely vacant.

[metro]

Yeah, Dowell Center is supposively going under a renovation as well. They are currently using the grant money to remove asbestos as Pete said.

[actionman]

When I was looking at office space I looked at First National Center. That place needs some serious remodeling above the first floor. It just looks old from the floors to the ceilings.

Is 50 North Robinson the Sheraton Parking Garage ? That place needs a grade lower that C. Nasty for office space.

55 North Robinson is not in there but that place has quite a bit of open space also. The IRS used to occupy most of the building. Now there are various spots all over the building for lease commercially. Most of the 3rd floor is available there.

[jbrown84]

I was told that FNC has asbestos problems yesterday, but I have not seen anything about that anywhere else. Is that true?

[Architect2010]

It does...My brother just came home from prison and he has a job with abestos removement and hes going to be working at FNC for a while.

[metro]

Oklahoma City office vacancy increasing
Journal Record
December 16th, 2008

Last week I blogged about how if the decline in oil prices is prolonged, it will likely cause turmoil among numerous small to mid-sized energy firms in the metro area causing downsizing and closings, which in turn would lead to an increase in vacancy. Now, it appears the decline in oil prices may already be having an affect on Oklahoma City’s office market.

While vacancy fell to its lowest level in well over a decade to 15 percent during the second quarter of 2008, REIS is reporting that vacancy jumped back up to 15.9 percent during the third quarter. Furthermore, early indicators and research point to the possibility that year-end vacancy will be slightly over 16 percent.

The good news is compared to the high vacancy the market experienced just four years ago, 16 percent still represents a healthy vacancy for the market. In 2003 and 2004, vacancy shot up to nearly 24 percent; therefore, even if vacancy does continue to slightly increase in 2009, the market should retain the strength it has gained since the end of 2004.

[Platemaker]

Funny how this article gives no specifics on how oil is the reason for the vacancies (what companies vacated and how they directly relate to oil).... just speculates.

[BDP]

Good point. Association doesn't prove causation.

What was the change in inventory?

[stlokc]

I don't know that this is the primary cause of the rise in vacancy rates, but when I was at home over Thanksgiving, what really struck me was the nature of the new office developments in OKC. Within a couple of miles of my parents' house in Quail Creek, there must have been five or six of these new "office parks" that consisted of six or eight or ten smallish, house-like buildings, each containing individual companies. That seemed to be a trend; companies could get affordable, new construction with free parking and be convenient for the half-dozen employees. It struck me that this was bad urban planning and a terrible addition to the sprawl-like nature of OKC. Not to mention that they didn't look very much like offices. But now this thread makes me think that these developments could be adding to the office vacancy. I am assuming many of these small doctors offices, law offices, insurance places, contractors etc. were in multi-tenant buildings at one time.

[jbrown84]

Very true stl.

I wouldn't worry about it too much. I'm sure it's happening everywhere.

[metro]

Very true stl.

I wouldn't worry about it too much. I'm sure it's happening everywhere.

In this part of the country.......

[jbrown84]

By that I meant that the increase in vacancy is surely happening everywhere.

[HOT ROD]

Very good point, it didn't point out the fact that the city added capacity.

That said, we need to further diversity the city's employment opportunities. Isn't this something that the Chamber could begin to run with? With the economy the way it is, and OKC's attractiveness in the Cost of Living and Taxation attributes, not to mention OKC's renaissance and central location; Im positive the city could pull off some white collar relocations thereby filling up office space (DOWNTOWN!!!). We could also set up incubators for small upstarts, who can get in at heavily reduced rates in the short run but in the long run would move nearby to other downtown towers.

One more option for OKC would be to go after more Federal Government offices. .. They are ALWAYS looking for space, and certainly OKC is attractive to them too.

[hipsterdoofus]

Good thing we are building a new skyscraper...

[bombermwc]

And if you look downtown, I bet you'll find the Class A and B space is pretty danged full. Like usualy, we have a lot of crap Class C space that no one every wants....and no one will invest to clean it up. FNC has a lot of that....

[ljbab728]

This is really an amazing statistic.

Oil runs in the streets of downtown Oklahoma City's booming office market | News OK

Flash “No” over downtown Oklahoma City’s best office buildings, for “No Vacancy” — but hurry.

No one knows how long it will last.



Price Edwards & Co. reported Wednesday that downtown Class A office space ended 2014 with a vacancy of 0.7 percent.

“We’re basically out,” said Craig Tucker, the firm’s managing broker and an office specialist.

[bombermwc]

You hear this and then you hear people talking about why not to build another tower right now. I just don't ever get developers......

Would you classify OG&E's space as A or B? There isn't a lot of it so it's not going to saturate the market or anything. We got lucky as all hell when Devon's got swallowed up by Continental.

[Urbanized]

The elephant in the room is Sandridge.

[Pete]

I think Continental would snap up the SandRidge properties were some or all to become available.

[Urbanized]

Yeah my thoughts as well. Which might domino their current space(es), of course.