Oklahoma City dodges 'zombie office towers' so far, but has dealt with dead-eyed vacant buildings before
Zombie office towers haunt some big-city downtowns, terrorizing property owners and brokers, but apparently, none has lurched into Oklahoma City, not lately anyway.
There's not a single mention of zombies — office buildings staggering under extra heavy vacancies, due lately to COVID-initiated remote working and shifting corporate attitudes about how office space is used — in OKC brokerage Newmark Robinson Park's Office Market Overview for 2023.
Not that some office buildings aren't stressed. Nearly a third of all office space for lease in OKC was dark at the end of 2022. Overall vacancy just crept up last year, from 28.5% to 28.8%.
But: "Large blocks of vacant space continue to pose a challenge for occupancy rates throughout the city," the report said. "There is also a lingering concern that national companies with large office footprints could vacate or downsize as they continue to weigh their post-pandemic real estate strategies, which would add additional space to an already over-supplied market."
Scary. But not a real estate zombie apocalypse.
Midyear '22 Price Edwards office report Analysis: Do OKC office buildings for lease have long COVID? The shadow space knows
Downtown Oklahoma City is no stranger to zombie office towers
Zombies do lurk.
Tanenbaum has lots of experience with the office undead: He's brought other zombies and near-zombies back to actual life, including The Montgomery, a former Montgomery Ward, and Park Harvey and The Presley, former office buildings.
And Gary Brooks could be called the Zombie Slayer for the work he did saving gasping First National Center by converting it to a hotel, apartments, retail and dining.
Before adaptive reuse was cool, Bricktown as a whole was a nest of zombies, although back then people just called it a ghost town. Bricktown's time among the undead and its revival are well documented by my colleague Steve Lackmeyer's research and writing.
Now, something like adaptive use is surging, but it's usually called mixed use.
"Development activity has shifted from strictly office or retail complexes to mixed-use developments with large success," Newmark Robinson Park said in its overview, mentioning its $177.5-million, 218,000-square-foot project with Tanenbaum, Convergence, a mix of research labs, office space, retail and a hotel(?).
Convergence is adapting even as it's being developed, with the hotel reportedly on hold.
Now, for a few zombie-free stats from Newmark Robinson Park's Office Market Overview for 2023.
Here's a snapshot of the Oklahoma City office market at the start of 2023
Newmark Robinson Park's reported is loaded with numbers, such as asking rents, vacancy rates, new and planned construction, and significant leases by submarket. Here's a metrowide overview.
Total inventory: 18,457,739 square feet. That's 320 football fields, or about 423 acres, almost three times the size of our pasture when I was a kid.
Breakdown by class: Class A (the best), 6,057,515 square feet; Class B (not bad), 9,533,132 square feet; Class C (not good), 2,867,092 square feet.
Here's are highlights of the Oklahoma City office market in 2022
Absorption: -147,093 square feet, meaning that much more space was vacated than newly occupied.
Vacancy rate: 28.8%.
Under construction: 414,100 square feet.
Planned: 128,000 square feet.
Senior Business Writer Richard Mize has covered housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Contact him at rmize@oklahoman.com. Sign up for his weekly newsletter, Real Estate with Richard Mize.
This article originally appeared on Oklahoman: Oklahoma City weathering "zombie office tower" vacancy trend
