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One local economy supports several realty sectors, Oklahoma City firm points out

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The real estate business doesn't happen in a vacuum, and its property sectors don't operate in silos — except for actual silos, which are agricultural, and that is not one of the sectors covered by NAI Sullivan Group.

There is a general local economy, and CEO Bob Sullivan keeps it general rather than straining at gnats to tailor an economic backdrop for each of his realty firm's fourth-quarter 2018 market reports — retail, office, industrial, and multifamily.

Most of each report stays in its own lane, as they say, but each paints the local picture like this:

"Despite the falling oil and gas prices in December 2018 after the most expensive month at the pump in four years, the Oklahoma City commercial real estate industry remains active and strong. Dolese Bros. is out of room at its downtown corporate headquarters and plans to build a new facility in north Oklahoma City. Industrial market is improving thanks to the e-commerce growth, interstate system and also the new marijuana law. The Amazon distribution center in Oklahoma City is expected to open by the end of 2019. ... Costco is well under construction and is expected to open during summer 2019. Cranes are up throughout the Core to Shore area with the construction of the new convention center and the 17-story Omni hotel as well as Scissortail Park."

That is about as concise a collection of general Oklahoma City commercial real estate highlights as could be. It's so Oklahoma City it needs a Thunder reference, but the last time the Thunder made real estate news was the last time Kevin Durant sold an over-the-top, over-renovated, uber-luxurious home at a loss. But I digress.

For all the stats, see the reports at www.naisullivangroup.com. Here are some of the summaries by sector.

Retail

Report by Nathan Wilson, retail broker.

• Sales transactions up 8 percent from the third quarter, but still third lowest of the year, expected to increase this quarter.

• Vacancy rate down, lowest since first quarter 2017, expected to trend down as rental rates creep up.

• Newcomers: REI, to take the former Baby's R Us space at Belle Isle Shopping Center, and Bubba's 33, to locate at Westgate Market Place.

Office

Report by Bob Sullivan.

• Absorption strongest since first quarter 2017.

• Rental rates steady, with Class A at $22.32 per square foot per year, Class B at $16.53, to remain steady.

• Investment strong with 59 sales in the fourth quarter, totaling $40 million at $121.19 per square foot on average, to remain strong.

Industrial

Report by Sullivan.

• Negative absorption of 151,519 square feet.

• Leasing rates flat at $4.45 per square foot per year on average, triple-net basis (tenants pay taxes, capital expenditures, insurance and maintenance), Class A near $5.70 triple net, to remain flat.

• Investment strong with 69 transactions totaling $74,027,510 at $60.35 per square foot on average, to remain strong.

Multifamily

Report by Sullivan.

• Overall vacancy down to 10.6 percent from 12.2 percent at the first of 2018, lowest downtown at 9.6 percent.

• Construction expected to slow but keep up with demand.

• Investment strong with 25 sales in the fourth quarter totaling $152,711,900, the largest at 777 N Air Depot Blvd., Midwest City, for $35,970,500, or $120,805 per unit, to remain strong on continued strong demand.

Richard Mize

Real estate editor Richard Mize has edited The Oklahoman's weekly residential real estate section and covered housing, commercial real estate, construction, development, finance and related business since 1999. From 1989 to 1999, he worked... Read more ›

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