2005 Industrial Survey Pages - Price Edwards & Company Industrial Survey_0.pdfin build-to-suit anchored projects. Even in the present vacancy environment, the return of national tenants

Oklahoma CityOklahoma CityMulti-Tenant Industrial

Market Summary2005

Oklahoma CityOklahoma CityMulti-Tenant Industrial Market Summary

The information contained herein has been obtained from reasonably reliable sources. Price Edwards & Company makes no guarantee, either express or implied, as to the accuracy of such information. All data contained herein is subject to errors, omissions and changes. Reproduction in whole or in part, without prior written consent is prohibited.

2

ContentsIndustrial Market Summary ............... 2

Industrial Submarket Map ................. 3

North Submarket ............................. 4

Southeast Submarket ...................... 5

Southwest Submarket ....................6-7

The last twelve months have seen a dramatic turn-around in the Oklahoma City multi-

tenant industrial market. As the national economy continues to rebound, national

and regional tenants expanding into the market compliment the continued growth of

local industrial companies. The reduction in vacancy rates still leaves the market with

double-digit vacancy in multi-tenant product while the industrial market as a whole is

below 8% vacant.

All three property classes saw positive net absorption since our last report in 2004.

Although Flex space saw the smallest incremental gain of 2% (148,000 square feet of

net positive absorption), this is perhaps the most dramatic

category in that it reverses a four year trend of increasing

vacancy. The current rate is 15%, down from 17% in 2004.

During this time period, approximately 175,500 square

feet of new construction was added to the market. The

new construction represents the arrival of modern fl ex

space in Oklahoma City. The majority of this product type

is still characterized by the 1980’s vintage space with low

clear heights and limited parking.

Bulk warehouse reported the largest net positive

absorption of 225,000 square feet. This resulted in a drop

in the vacancy rate from 22% in 2004 to 18% currently.

This gain in occupancy has been accomplished in an

environment of fi erce competition for tenants and highly discounted rental rates. We

have seen multiple deals by institutional owners dropping base rental rates below $3.00

per square foot per year. Operating expense reimbursement rates and structures have

also become increasingly competitive. Because rental rates have dropped while actual

operating expenses continue to increase, operating expenses are becoming a much

more signifi cant component of tenants total rent.

Service warehouse space registered 98,000 square feet of net positive absorption

with a vacancy decrease from 37% in 2004 to 31% in 2005. This product type is the

smallest total square footage of the three categories and is contains modern space

This report covers only multi-tenant, investment grade industrial buildings. We classify buildings according to clear height into three categories:

• Flex Space is considered to be less than 18 feet,• Service Warehouse is from 18 to 23 feet• Bulk Warehouse is 24 feet or greater. Generally the minimum size building tracked in any of the property types is 35,000 square feet.

Historical Vacancy Oklahoma City, OKBulk Wharehouse Flex Space Service Wharehouse

0%

5%

10%

15%

20%

25%

30%

35%

40%

2005200420032002200120001999

SouthwestSouthwest SoutheastSoutheast

NorthNorth

Lake Hefner Parkway

Lake Hefner Parkway

Broadway Extension

Broadway Extension

Kilpatrick TurnpikeKilpatrick Turnpike Memorial RoadMemorial Road

State CapitolState CapitolComplexComplex

Southwest Southeast

North

Lake Hefner Parkway

Broadway Extension

Kilpatrick Turnpike Memorial Road

State CapitolComplex

40

40

44

44

77

44

44

35

35

74

35

240 240

as well as functionally obsolete warehouse buildings with lower clear height.

One or two leases or vacancies can result in large swing in the overall vacancy

rate, but taken with the other product types represents a positive indicator for

the market.

Again this reporting period there were not many sales of multi-tenant industrial

properties. Most purchases by local investors were single tenant facilities. There

were three sales of properties covered by this report. These are summarized

below:

• 7501 N. Broadway – North Sub-Market – 50,400 Square Feet – This Service

Warehouse property was purchased by 7501 Partners L.L.C. in April 2004

for $2,100,000 or $41.66 per square foot.

• Classen Business Park – 8100 N. Classen - North Sub-Market – 64,750 Square

Feet – This 1980’s construction Flex space park was purchased by North

Classen Partners L.L.C. in September 2004 for $2,200,000 or $33.97 per

square foot.

• Century Business Park – 2236 N.W. 10th – Southwest Sub-Market - 80,960

Square Feet – This Flex space development was purchased by CBP Partners

L.L.C. in January 2005 for $42,500,000 or $30.88 per square foot.

2005 FORECAST

Vacancy

As the local and national economies continue to grow, we see a steady demand

for industrial space and absorption of existing vacancy. The double digit vacancy

reported for all three product types will generally inhibit new development,

but certain space requirements (such as 50,000 square foot or greater bulk

warehouse spaces) currently offer few choices for tenants.

Rental Rates

We believe the market has stabilized to the point that rental rate discounting

will not proceed to deeper levels. Sophisticated tenants are negotiating caps to

expense reimbursements which may result in fl at or negative net income growth

if owners cannot control actual expense growth.

New Construction

We do not foresee any signifi cant speculative development except as excess space

in build-to-suit anchored projects. Even in the present vacancy environment, the

return of national tenants to the Oklahoma City market may result in construction

of a signifi cant amount of this type of space due to the limitations of existing

product.

3

Market Distribution of Industrial Property

North SouthwestSoutheast0%

20%

40%

60%

80%

100%

21% 18%

61%

Existing Space By Product Type

Bulk Warehouse Service WarehouseFlex Space0%

10%

20%

30%

40%

50%

47%

30%23%

Vacancy By Product Type

Bulk Warehouse Service WarehouseFlex Space0%

5%

10%

15%

20%

25%

30%

35%

18%15%

32%

Oklahoma City Industrial Submarket Map

Oklahoma CityNorth Submarket

Oklahoma City

4

0% 10% 20% 30% 40% 50%

North Submarket by Product Type

Bulk Warehouse

Service Warehouse

Flex Space29%

33%

23%

38%

47%

30%

North Submarket vs. Total Market

Vacancy

Bulk Warehouse Service Warehouse Total MarketFlex Space0%

5%

10%

15%

20%

25%

30%

35%

12%

16%

22%

17%

North Submarket vs. Total Market

18%15%

32%

20%

North Submarket Percentage of Total Market

North

SoutheastSouthwest

21%

61%18%

CURRENT MARKET

• Aggregate Vacancy is 18.0%

• Aggregate available rental rates are:

• Bulk warehouse ...........$2.75 - $3.85

• Flex Space ..................$2.00- $8.50

• Service warehouse ........$2.00-$3.00

Location Type GLA Vacant % Vac. Rate

11300 Partnership Drive BWH 145,600 55,000 38% $4.78

11301 Partnership Drive BWH 140,000 0 0% $3.75

11303 Partnership Drive BWH 145,000 0 0% $3.85

615-701 W Wilshire BWH 300,000 33,480 11% $2.75

North Bulk Space Total 730,600 88,480 12%


100-200 W Wilshire FLX 242,048 48,241 20% $3.00

401 E Memorial FLX 58,400 43,600 75% $7.50

430 W Wilshire FLX 38,250 0 0% $8.00

710 W Wilshire FLX 65,060 2,000 3% $5.75

7504 Broadway Extension FLX 66,038 3,441 5% $8.50

8100 N Classen FLX 64,750 5,000 8% $3.75

Edmond Business Park FLX 90,000 45,000 50% $8.00

North Flex Space Total 624,546 147,282 24%


14400 N Lincoln SWH 52,395 3,150 6% $4.00

1825 N Walnut SWH 159,014 25,000 16% $2.25

217 NE 30th SWH 55,000 0 0%

3501 N Santa Fe SWH 208,000 0 0% $2.25

3815 N Santa Fe SWH 140,000 114,911 82% $2.00

4228 N Santa Fe SWH 163,201 43,000 26% $3.00

7501 Broadway Extension SWH 50,400 0 0%

North Service Space Total 828,010 186,061 22%

North Submarket Total 2,183,156 376,823 17%

5

Oklahoma CitySoutheast Submarket

Oklahoma City

0% 10% 20% 30% 40% 50%

Southeast Submarket by Product Type

Bulk Warehouse

Service Warehouse

Flex Space24%

46%

30%

Southeast Submarket vs. Total Market

24%

47%

29%

Southeast Submarket Percentage of Total Market

North

SoutheastSouthwest

21%

61%18%

Vacancy


10%

20%

30%

40%

50%

60%

70%

80%

9%

19%

70%

29%

18% 15%

32%

20%



4901 S I-35 BWH 94,000 0 0%

6400 E I-240 BWH 465,000 15,000 3% $4.50

6401 S High BWH 102,020 0 0% $4.00

7201 S Sunnylane BWH 120,000 60,000 50% $3.75

9401 S Pole Rd BWH 60,000 0 0% $4.00

Southeast Bulk Space Total 841,020 75,000 9%


1125 SE Grand FLX 72,000 9,000 13% $3.50

1533 SE 66th FLX 50,000 1,500 3% $5.00

2200 N Moore Ave FLX 139,000 25,000 18% $3.75

4000 E I-240 FLX 72,000 30,000 42% $3.50

4901 S I-35 FLX 72,366 0 0%

5701 E I-240 FLX 40,605 17,940 44% $5.00

Southeast Flex Space Total 445,971 83,440 19%


1111 SE 59th SWH 440,000 380,000 86% $3.25

2020 SE 18th SWH 48,250 0 0% $3.00

4600 S I-35 SWH 52,800 0 0% $3.50

Southeast Service Space Total 541,050 380,000 70%

Southeast Submarket Total 1,828,041 538,440 29%

CURRENT MARKET



• Bulk warehouse .............$3.75-$4.50

• Flex Space ..................$3.50- $5.00



10 S Meridian BWH 154,456 53,000 34% $3.50

1301 Cornell Parkway BWH 33,609 9,438 28% $4.25

1330-1398 Metropolitan BWH 69,167 0 0% $3.25

3500 S MacArthur BWH 171,000 15,000 9% $8.00

3501 Melcat BWH 106,672 0 0% $3.25

3601 S Thomas Rd BWH 241,000 0 0%

3701 S Thomas Rd BWH 93,610 0 0% $3.50

3800-3860 S Harmon BWH 114,804 0 0% $3.50

400 N Ann Arbor BWH 119,700 68,750 57% $3.50

4001 NW 3rd BWH 95,000 0 0% $2.75

4001 Will Rogers Parkway BWH 101,504 0 0%

4401 SW 23rd BWH 106,038 106,038 100% $2.95

4680 NW 3rd BWH 151,200 0 0% $3.50

4801 S Council BWH 50,000 50,000 100% $4.00

5001 SW 36th BWH 122,945 0 0%

5001 W Reno BWH 242,935 56,225 23% $2.50

5024 SW 36th BWH 102,567 0 0% $3.75

5200 SW 36th BWH 210,000 120,000 57% $3.85

5500 SW 36th BWH 76,500 16,083 21% $3.25

5555 Morton Avenue BWH 99,360 99,360 100% $3.00

5600 SW 36th BWH 87,200 0 0% $3.50

600 N Sara Road BWH 120,000 38,000 32% $4.50

6100 NW 2nd BWH 110,080 0 0% $3.50

7738 SW 34th BWH 180,000 67,500 38% $3.25

7900 Gemini BWH 142,500 6,750 5% $3.00

7900 SW 34th BWH 142,500 0 0%

Southwest Bulk Space Total 3,244,347 706,144 22%

6

Southwest Submarket Percentage of Total Market

North

SoutheastSouthwest

21%

61%18%

0% 10% 20% 30% 40% 50%

Southeast Submarket by Product Type

Bulk Warehouse

Service Warehouse

Flex Space24%

46%

30%


24%

47%

29%

Vacancy


5%

10%

15%

20%

25%

30%

35%

22%

13%

19% 18%18%15%

32%

20%

Southwest Submarket vs. Total Market

Current Market



• Bulk warehouse .............$2.75-$4.50

• Flex Space ...................$3.25-$7.00


Oklahoma CitySouthwest Submarket

Oklahoma City

7


1000 Cornell Parkway FLX 27,000 0 0% $4.25

1101-1121 Cornell Parkway FLX 41,720 0 0% $6.00

1233 Soverign Row FLX 39,085 8,083 21% $7.00

2126 S. Meridian FLX 64,568 0 0% $0.00

2236 NW 10th FLX 80,960 12,000 15% $3.50

235 N MacArthur FLX 68,229 16,080 24% $7.00

304-306 N Meridian FLX 196,000 17,000 9% $4.75

312 Quadrum Dr FLX 189,829 65,000 34% $7.00

3400 S Thomas Rd FLX 40,960 0 0% $3.50

340-350 S Vermont FLX 118,565 4,185 4% $3.25

400 S Hudiburg Circle FLX 15,000 0 0% $4.75

400 S Vermont FLX 143,750 30,000 21% $3.50

4000 Will Rogers Parkway FLX 63,907 0 0% $0.00

401 N Meridian FLX 41,190 10,848 26% $6.00

4020 Will Rogers Parkway FLX 65,438 5,803 9% $4.75

406 Hudiburg Circle FLX 25,000 0 0% $4.75

4100 Will Rogers Parkway FLX 66,732 22,308 33% $4.75

4130 Will Rogers Parkway FLX 65,520 0 0% $3.00

4141 Highline FLX 73,607 11,000 15% $6.50

4311-4325 SW 21st St FLX 68,270 6,000 9% $4.25

4703 Enterprise FLX 34,000 4,000 12% $3.25

4901 W Reno FLX 43,560 0 0% $6.50

6000 NW 2nd FLX 79,071 3,907 5% $4.75

6101-6125 W Reno FLX 75,843 34,458 45% $6.50

6924 Melrose Lane FLX 152,000 1,500 1% $5.00

7114 Melrose Lane FLX 124,200 4,500 4% $4.00

Southwest Flex Space Total 2,004,004 256,672 13%


1001 Enterprise SWH 80,256 27,360 34% $4.00

1101 Enterprise SWH 63,840 0 0% $3.50

1101 Metropolitan SWH 29,220 0 0% $3.50

1131 Enterprise SWH 80,256 20,064 25% $3.50

301-397 N Harvard SWH 81,000 36,000 44% $3.00

3600 S MacArthur SWH 44,750 0 0%

4116 Will Rogers Parkway SWH 65,800 10,991 17% $3.50

417 Hudiburg Circle SWH 30,000 0 0%

4210 Will Rogers Parkway SWH 60,000 0 0% $3.00

4220-4232 Charter Ave SWH 56,275 7,211 13% $3.75

4243 Will Rogers Parkway SWH 49,920 0 0% $3.50

4301 Will Rogers Parkway SWH 33,647 9,659 29% $5.50

4601-4627 NW 3rd SWH 68,408 53,003 77% $3.25

4700-4728 NW 1st SWH 52,340 15,400 29% $3.00

727 Overhead Dr SWH 92,214 9,848 11% $3.25

900 Metropolitan SWH 61,600 0 0% $3.50

901 Enterprise SWH 80,256 1,920 2% $3.50

Southwest Service Space Total 1,029,782 191,456 19%

Southwest Submarket Total 6,278,133 1,154,272 18%

OKC Industrial Market Total 10,289,330 2,069,535 20%

PRICE EDWARDS & COMPANYMARKET RESEARCH

Price Edwards & Company has been the leader in the Oklahoma City Market over a decade not only in terms of completed transactions, but in market research as well. This report as well as our other market summaries are available either by request or can be freely downloaded online from our website at www.priceedwards.com.

This site continues to feature online digital copies of all Oklahoma City market studies for the past several years, Oklahoma City market information and market outlooks as well as news and information about current activity in the market.

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2005 Industrial Survey Pages - Price Edwards & Company Industrial Survey_0.pdfin build-to-suit anchored projects. Even in the present vacancy environment, the return of national tenants