OKC commercial real estate office industrial retail apartments update
Housing rents rose, retail stores were in a “scramble,” office rents fell, and industrial real estate in Oklahoma City was still on fire in the third quarter, the NAI Sullivan Group said this week.
Here are the highlights from the company’s in-depth reports available at www.naisullivangroup.com.
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Homeowners are driving up rents
Rents rose by an average of 8.5% last year, reports multi-family specialist Micalyn Wetwiska. It could be worse. She said some Sunbelt cities had migrations of more than 20%.
With construction slowing during the worst period of the coronavirus pandemic, supply was unable to keep pace with demand and the overall vacancy rate fell from 7.9% in the second quarter to 6.6% in the third, the lowest level since 2014, said Wetwiska.
“The decline in supply has allowed homeowners to push for higher rents,” she said, but paying increasing rents is still easier than buying a home.
“Low interest rates have created an extremely competitive housing market that homeowners benefit from,” she said. “Tenants are forced to rent because home buying has become so competitive that most have no choice but to rent.”
Wetwiska tracked 46 apartment sales for a combined $ 233 million, the largest 850-unit Isola Bella Apartments, 6303 NW 63, which was sold to New York investors on Aug. 23 for $ 56 million, or $ 65,882 per unit.
How is the Oklahoma County real estate market? Home prices have risen over the course of the year
Restaurants lead retail rush to space
Retail was a “scramble” in the third quarter, reports David Hartnack, vice president of retail.
“The rise in retail users after the pandemic is causing vacancy rates to fall further and rental prices to rise. This applies in particular to all rooms that were built as a restaurant or with a drive-through, ”said Hartnack. “In addition, users have felt the urge to set rental rates for longer terms in order to combat expected inflation in the coming years.”
Investment sales rose as many retail property owners chose to sell amid uncertainty about long-term capital gains tax changes, he said.
Uncertainty also colors the outlook.
“While the market is busy right now, we’re not sure what 2023 will have to offer. Persistent supply chain concerns and changes in capital gains tax laws could have a dramatic impact on the retail market, ”Hartnack reported.
OKC’s home sales have recently dropped nearly 9% in a month. But the demand is still sky high
The largest office sale was in the city center
The third quarter saw 63 office transactions for a total of $ 86,244,612, reported office specialist Matthew Pierce, and the biggest selling hit was nearby:
The office building The Oklahoman is now renting space at 100 W Main St. was sold to Griffin Media Center OKC on August 2 for $ 16,025,000, or $ 145.68 per square foot. The sale was announced on July 12th.
The 110,000 square meter property is being remodeled, so I’m writing this at home. We’ll be returning downtown sometime after the first of the year.
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Incredible industry that is still sizzling
The warehouse vacancy rate in major cities fell to 3.2%, but it’s ridiculous in Edmond: 0.6%, reported Zac McQueen, industry specialist.
But Edmond isn’t exactly known for industrial property.
Nonetheless, its capture of more than 100,000 square feet in the third quarter made it “the hottest on the metro,” McQueen said.
“The national industrial market as a whole had a record quarter on various key metrics such as rent, vacancy and net absorption,” he wrote. “National industrial vacancies fell to an all-time low of 4.1% and average rents hit an all-time high of $ 7.18 per square foot.
“Oklahoma City has seen much of this national success on the ground. Vacancy rates remain extremely low and construction is finally starting to respond with the largest purely speculative Class A industrial development ever built in the city. Many hope and expect it. “Bring even more jobs and growth to the city’s national distribution structure.”
Senior Business Writer Richard Mize has been covering housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Contact him at [email protected]