Office Market Sees Vacancy Rates Rise Slightly.
2017 proved to be another tough year for landlords in the Oklahoma City Office market. The market had negative absorption in 2017 of 166,000 square feet; coming on the heels of historically bad negative absorption of approximately 520,000 square feet in 2016. Overall, the local market’s vacancy rate increased from 15.5% to 18.0%.
The biggest hits were once again felt in the Northwest submarket which has historically been the area of choice for energy companies. Since the peak oil price in June 2014, this submarket has experienced negative absorption of 460,000 square feet. In the past three years, this submarket alone contributed 62% of the market’s overall negative absorption. The vacancy rate in the Northwest rose from 17.2% to 19.1%. The good news for the Northwest submarket is that the worst seems behind it as even most sublease opportunities have been fully absorbed into primary vacancy, eliminating the shadow of an additional three to four percentage points of vacancy that was not included in our reports. This is still a very popular area of the city and leasing activity appears to be on an uptick, so this submarket should bounce back in the next couple of years.