Industrial turtle back to a crawl
Big speculative industrial construction in Oklahoma City is like a spastic turtle: nothing, nothing, nothing, slow, OMG, slow, nothing.
It's been the exception rather than the norm for most of the century so far, whether built for sale or lease.
Just about anything at 100,000 square feet or bigger, especially, is general business news. After a flurry of spec construction activity during the late energy boom, it looks like we're back to slow at that size.
"We seem to be in a time of change, not a lot of speculative construction," Bob Sullivan confirmed in his firstquarter industrial market report from NAI Sullivan Group.
Not that the market for industrial space is dead. It's just being its usual turtle-ish self.
Sullivan said demand for purchasing industrial property as an investment is strong "as companies are trying to get ahead of the interest rate hikes everyone believes are coming."
First, construction, most of which is not speculative, which is to say: First, Hobby Lobby.
Hobby Lobby, which already owns and operates nearly 10 million square feet of warehouse distribution space in southwest Oklahoma City, is responsible for about 1 million square feet of all industrial space under construction in the city.
The newest Hobby Lobby space, at 6701 SW 44, is scheduled for delivery in August.
(Competing with Hobby Lobby for attention and almost surely soon to compete in scale is the 2.6-millionsquare-foot Amazon warehouse distribution center and other projects in the works at Lariat Landing, on airport trust land near Will Rogers World Airport.)
The second largest building underway now is speculative, a 120,000-square-foot Class A building by state investors and marketed by CBRE, at 6101 SW 44.
Sullivan reported two notable smaller completions in the first quarter: a 30,338-square-foot warehouse at 10220 W Reno Ave., delivered in March and fully leased; and an 18,000-squarefoot warehouse at 8701 N Classen Blvd., Building 1, with 12,600 square feet available.
Among $25.1 million in first-quarter sales was this highlight:
Sealy & Co., Dallas, paid $7.8 million, or $67.54 per square foot, to Matsushita International Corp., San Clemente, California, for a single-tenant, occupied 115,488-square-foot distribution warehouse at 4701 West Point Blvd.
It was another big drop in a big bucket for Sealy & Co., which paid more than $50 million last June for a portfolio of 17 leased warehouses and distribution centers in the heart of industrial southwest Oklahoma City.
Scott Sealy, vice president of business development, said then that the investment firm looked forward to expanding its business here, and it did.
To read the complete NAI Sullivan first-quarter market report, as well as reports on office, retail and multifamily, go to www.naisullivan group.com/market research2018.