Northeast Oklahoma Real Estate Services, a subsidiary of the Greater Tulsa Association of Realtors, and Xceligent, Inc., a nationwide provider of property and listing information for the commercial real estate industry, has released first quarter market reports for Tulsa commercial office and industrial segments.
January 2011 showed increased activity for the Tulsa office market, but the volume of deals remained flat, and half of February was lost due to the blizzard. Most of the focus remained on increasing energy prices and downtown improvements, such as the proposed Place One, two factors that should help the Tulsa office market.
With Tulsa serving as a regional healthcare provider, brokers expect to see increased office demand by those users. Announcements by companies like II are positive signs for suburban office growth. In addition, recent expansions from companies like The Williams Companies downtown resulted in positive absorption for the first time since the recession began. Small deals and call centers continue to provide some positive momentum as Tulsa prepares for slow and steady growth. This confirms Tulsa’s recent ranking among the nation’s top ten large metros in a small-business vitality ranking published by The Business Journals; Tulsa ranked number six out of the nation’s 100 largest metropolitan areas for offering the best climate for small businesses.
With just over 60,000 square feet of positive absorption, the Tulsa industrial market is on the right track, but the volume of signed deal sheets is still lagging behind expectations. There continues to be a disconnect between landlords and tenants, and between buyers and sellers. With increasing energy prices, the number of energy service companies expanding goes up in direct correlation to the Oklahoma rig count. Small prospects are the depth of the market ranging from 10,000 to 15,000 square feet. For large users of 80,000 square feet and above, they have many options to choose from.
While manufacturing and exporting boosted the industrial market, the warehouse/distribution segment is very soft, and large blocks of space became available, driven by former Grocery DC’s to the United Warehouse and Airpark II complexes in the northeast submarket. With most Distribution Centers located in major population markets due to logistics, the Tulsa market is more regional and local with lower rents that cannot overcome the cost of transportation from production to consumers.
Tulsa’s industrial lending market remains frozen for most investment buyers. With community banks under increasing regulatory scrutiny, there are fewer deals that pencil out prior to the recession. Opportunities for owners/users using the Small Business Administration are strong. Perhaps the best description of the Tulsa industrial market was described at GTAR’s 2011 Greater Tulsa Commercial Market Update in March, “We are on a roller coaster, and are now on a slow moving train towards recovery.”