Dancing in the rain will oftentimes produce a better result than waiting for the storm to pass. Amidst a national economic crisis, Oklahoma City has continued to push forward toward growth and progress. Canoo to buy a vehicle manufacturing facility, $3.8 billion in positive economic impact from tourism, Mexican consulate to open in Oklahoma City, and over $400,000 granted to OKC Minority Founder Accelerator are just a few notable Q4 headlines to be released. As we close out the year, Oklahomans are hopeful and excited for the years to come given the fact that a multitude of indicators are foreshadowing a prosperous future for the local Oklahoma City economy.
Although certain growth metrics such as market rents, vacancy, net absorption indicate a slower Q4, the local Oklahoma City office market continues to challenge the mainstream narrative that, “office is dying a slow death.” Oklahoma City will be closing out the year a fifth consecutive quarter of positive net absorption. Market rents continue their accension with 1.5% positive growth for Q4. New construction office commencement saw a significant decline, which sheds some light on the fact that 2nd generation office landlords are seeing some real opportunity to capitalize on both leasing and sales opportunities, as tenants transition back to working in the office and investors are seeking to place capital in stabilized assets. Notable leasing transactions for the local CW team include a landlord rep 40,000SF midtown office lease with a prominent local law firm, and a landlord rep 50,000SF suburban office lease with the State of OK. Notable sales transactions for the local CW team include a seller rep $8.5 million sale to a local owner user group and a $10 million sale to a local investment group. While we anticipate continued growth in office leasing, we anticipate a minor decrease in sales volume due to the current rate environment.
Oklahoma City’s local CW team is sprinting toward a strong finish to the year and is expecting to carry that same momentum well into 2023, as the economy attempts to recover, the fed gets a handle on inflation, and organizations continue to make their way back to the office.