Vacancy is falling slowly in the 17.3-million-square-foot Oklahoma City general purpose, multi-tenant office market, and rents have stabilized. Reis reports a second quarter vacancy rate of 19.1%, down 30 basis points for the period on 63,000 square feet of positive net absorption. The rate was down 140 basis points from a year earlier. The Class A vacancy rate was 13.1%, down 270 basis points from a year earlier, while the Class B/C rate was 22.0%, down just 80. Thanks to another 80,000 square feet of net absorption in July and August, the rate reached 18.6% in the latter month.
The 1.8-million-square-foot owner-occupied Devon Office tower completed construction in March according to Reis, and the multi-tenant market has been forced to create net absorption despite the movement of Devon to its own property. In addition, 26,000-square-foot Earlywine Business Park completed construction in a portion of Oklahoma outside Reis submarkets in June. With demand remaining solid, and new supply within Reis submarkets remaining limited, the vacancy rate is forecast to drift down to about 16.0% by 2016.
During the second quarter the average asking rent was unchanged at $14.90 psf with the average asking rent up 0.2% to $12.17 psf. There was no additional change through August, and Reis predicts modest increases of 0.7% by both measures for all of 2012. Gains of 1.3% asking and 1.9% effective are forecast to follow in 2013, with larger gains in later years. The Class A and B/C asking averages for the second quarter, meanwhile, were $18.08 psf and $13.33 psf.
Sperry Van Ness reports “office vacancy fell to 11.0% compared to 11.6% at year-end 2011.”