The industrial market in Oklahoma City is often confusing. There are two main market segments. The bulk of the market consists of owner-occupied buildings or investor-owned single-tenant buildings. This segment contains about 58 million square feet. The second part of the market, with about 10 million square feet, is multi-tenant facilities which range from 35,000 square feet on up to 1.3 million square feet. Taken together the industrial market contains just over 68 million square feet with 1500+ buildings. This makes Oklahoma City a 2nd-3rd tier market among metro areas with more than 1.0 million population. By way of comparison Chicago, now the largest industrial market in the country, contains over 1 billion square feet.
Despite the fall in crude oil prices and the local disruptions, this has produced, OKC is still a very well occupied market. The vacancy rate for the total OKC industrial market at the end of the 2nd quarter of 2016 was 6.2%. There is an increasing number of now vacant oilfield service company facilities coming to market, but these average 6,000 to 12,000 square feet, mitigating their impact on total market vacancy. The lowest vacancy rate in recent years was 5.8% in the 4th quarter of 2014. So two years into this crisis and vacancy has risen less than one half of one percent. Remembering the 1980’s, this is a testament to the diversification of the Oklahoma City economy since the 80’s.
The difficult aspect of these low vacancies is that in a market of this size, a vacancy rate in the 6% range means that for any given size increment of buildings or rental spaces, there are going to be limited choices available making space acquisition difficult for expanding local companies as well new entries into the market.