Industrial real estate at OKC is the gift that keeps on giving – until now

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Another large speculative industrial park is planned for Oklahoma City, this one by a St. Louis company whose executives were so impressed with the city that they came even though they were beaten last fall in a a competition for proposals to develop a huge “industrial reserve”. “east of the city.

Tristar properties just purchased land in west Oklahoma City to build up to 450,000 square feet of warehousing and distribution space. The project, at 9,500 W Reno, is small potatoes compared to what TriStar proposed for the subsidized reserve, set up by the Oklahoma Industries Authority, but it’s another big crush in the stew. OKC Boiling Industrial.

That’s about 3 million square feet of privately developed industrial space for rent planned or started here since last fall, more than ever at a time — nearly 70 acres under roof, or, with football in the air , think 52 indoor grills. Most of it is speculative, meaning no tenants have been lined up, but some has now been pre-let.

With several large industrial projects in the construction pipeline, here’s a big question: How much is too much, too fast? With record inflation threatening recession, industrial demand has generally slowed slightly this year, the NAI Sullivan Group said in a mid-year report by Zac McQueen, although demand is still “heated” for new office space. class A.

“This isn’t the first time I’ve been asked this question,” said Chris Roberts, industrial specialist at Price Edwards & Co., which represented TriStar in the transaction and is marketing the space. “Three million square feet is a high point for speculative industrial construction for the OKC market, but given the strength of the market, much of this space has already been pre-let prior to completion.”

At the east site, local developer Richard Tanenbaum won his bid to develop what is now OKC 577 into a mix of industrial, office and retail space on Interstate 240 and Bryant Avenue . Tristar Properties has proposed a long-term, $700 million project with 7.7 million square feet of industrial space and 25 acres for other commercial developments.

Despite the loss of the Eastside project, TriStar said, “We chose OKC because we believe in Midwestern markets with growing populations, where rental rates are high, vacancy rates are low, and inventory of modern products is limited”.

TriStar, though new to Oklahoma City, has developed more than 15 million square feet of industrial property worth $1.1 billion, Roberts said.

TriStar said it plans to deliver the first of two Class A buildings in Reno – that is, with the highest quality construction, state-of-the-art systems and a distinct presence on the market – by mid-2023.

OKC’s industrial site “at the geographic center of North America”, according to the company

Price Edwards introduces the TriStar property to potential distribution tenants, whether local, “last mile” or regional, and to manufacturers, such as “market center” in Oklahoma City. The “last mile” refers to the final stage of delivering products to consumers, typically purchased online.

“The site provides immediate access to I-40 and Morgan Road, which is considered the best ‘SPUI’ interchange in the Oklahoma City metro,” the company said. SPUI stands for “single point urban interchange”, also known as “single point diamond”, with freeway ramps, entrances and exits controlled by a traffic light, for better efficiency.

“Along I-40 and minutes from I-44 and I-35, this site is located in the geographic center of North America and less than a day’s drive from Texas, Arkansas, Kansas, Missouri, Louisiana and New Mexico,” Price Edwards says, and locally is within a 30-minute drive of Edmond, Norman, Moore, Midwest City, Piedmont, Yukon, Mustang and El Reno.

Retail, which means shopping – both online and in-person in stores – has recently boosted warehouse development, but could slow for a while as consumers cut back on spending to cope with the inflation, said Jim Parrack, the company’s senior vice president and retail specialist.

“Over the past few years, retail logistics has driven a significant portion of warehouse demand, especially for last-mile deliveries,” Parrack said. “This demand is coming from both digital and physical stores, as most retailers are figuring out the optical mix of the two. That said, there could be a lull in retail demand for warehouses as, at the nationwide, several have excessive warehousing capacity, led by Amazon.

Any job gains from the TriStar project, or any of the others, will depend on the type of companies renting the space. Distributors do not employ as many workers as manufacturers, but it depends on the factory technologies involved.

Either way, Price Edwards says the location is likely to appeal to manufacturers looking for an accessible and attractive site for the workforce due to its proximity to I-40 and the Kilpatrick Turnpike. “and more fast food options than competing sites”.

Roberts said there was room for all 52 indoor football pitches — the 3 million square feet of new warehouse or manufacturing space. The market is so small now that it is unhealthy, he said.

“As stretched as our market has been for the past five to seven years,” he said, “the hope is that this additional speculative construction will help ease some of that strain and create a healthier market. The market has been even tighter for spaces 100,000 square feet and above, creating a major void in our market compared to our peer cities that this wave of construction will help fill.”

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 [email protected]

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