Vision TULSA - The Tulsa City Council

purchased by CymStar for $2.15 million, or$42.92 per square foot. And local energy-relatedmanufacturer Economasters purchased the47,196-square-foot manufacturing facility locatedon West 21st Street for $750,000, or $15.89 persquare foot.Despite the increase in leasing and sales activity,there is still a large supply of functional distributionand office/warehouse space on the market.However, there are several categories that areexperiencing higher demand. The improvements inthe energy sector magnify the continued shortageof functional, crane-served manufacturing facilitiesof all sizes. And, as the local economy improves,there is a definite “flight to quality.”Requirements for recently constructed, concretetilt-wall distribution buildings with at least24’ ceiling clearance and ESFR sprinklersare increasing. Finally, the improved lendingenvironment has driven many users to considerpurchases of small buildings as opposed toleasing. As a result, demand is particularly high forwell-located, functional, freestanding buildings forsale in the 5,000-to-10,000-square-foot range.Historically, the industrial market has averagedapproximately 800,000 square feet of positive netabsorption annually. At this rate, there is a nearlyfour-year supply of inventory on the market beforean optimal occupancy level of 95% is reached. Asa result, development activity is minimal, althoughthere is still some new construction to report.FlightSafety’s 378,000 square foot headquartersproject in Broken Arrow was complete and fullyoccupied by September of 2011. Oil CapitalElectric recently completed its 77,000 square footfacility in Commerce Crossing Industrial Park.Air Hygiene’s new 30,000 square foot buildingin Broken Arrow was also completed in theSeptember time frame.The momentum that built 2011 should continueinto 2012. The top 25 industrial requirementscurrently looking for space in the Tulsa marketrepresent approximately 2 million square feet ofdemand. As these transactions are consummatedover the next several quarters, the market’svacancy rate should continue to decrease.Significant increases in lease rates and saleprices, however, are not likely until more supply isabsorbed.t u l s a c o u n c i l . o r g | VISION TULSA 2012 71