Celebrating the small victoriesPublished: Monday, August 17, 2009 7:00 am
OKLAHOMA CITY - The industrial real estate sector in Oklahoma City is facing significantly decreased sales volume. But even in a tight market, some deals are happening.
Randy Lacey, with Grubb & Ellis Levy Beffort, said the deals are not signs that things are great, but things could be worse.
"There is activity and there is demand," Lacey said. "The biggest cloud over the market is commercial mortgages. We're hearing there could be a lot of commercial mortgages that could become delinquent."
While some markets have seen an abundance of foreclosures and distressed properties, Lacey said, Oklahoma has largely been spared from those woes.
Some recent activity in Oklahoma City includes the $3 million sale of the former Ben E. Keith properties in south Oklahoma City to Oklahoma Goodwill Industries. Also, a Texas buyer purchased a former Frito-Lay building at 8704 Gateway Terr. for $1.2 million. Both transactions closed at the end of July.
Some may consider the deals as miniscule, but for brokers, every transaction is a victory.
"It's starting to liven up a little bit," said Barry Murphy, managing director of Commercial Oklahoma.
Murphy said the market will improve only when companies begin to once again look to expand, but low natural gas prices could keep the market stagnant.
"On the larger transactions, corporate America is still sitting on its hands," Murphy said. "People are starting to feel a little more comfortable with the economy but we're still a ways out."
Brett Price, with Sperry Van Ness William T. Strange and Associates, watched industrial activity, along with every other area of commercial real estate, grind to a halt in the fourth quarter of 2008. As 2009 crept in, Price was encouraged by numbers for the first six months of the year that showed about half the sales from the same time last year, with sales volume off only by about $3 million. And where deals might have taken three to four months to close in better times, Price said deals now often take twice that amount of time.
"It just takes longer to get deals done now than it used to," he said.
Despite stricter guidelines from lenders and hesitations in the market, Lacey said he believes the industrial sector will stay on track for the rest of the year.
"We're settling in a little bit to this, and people are adjusting," he said. "There is some pent-up demand because people have been staying put and not really doing anything."