Ecommerce isn’t just Amazon loves warehouses in Oklahoma City
As the COVID-19 pandemic emptied downtown offices, restaurants and stores, it helped boost the industrial space market, leading to low vacancy rates and high rents in places like Oklahoma. City.
This is because everything that is ordered online goes through one or two warehouses, or more, before it gets to people.
Successful e-commerce businesses, many of which saw their sales increase during the COVID-19 pandemic, needed additional space to meet increased demand. And this need for additional space contributes to low vacancy rates and high rents in the industrial space of Oklahoma City.
Fortunately, an Oklahoma City-based online subscription service that designs, fills, sorts, and distributes boxes of items designed to deliver a personalized date night – for example, a sushi class for two, or a night out. indoor camping with the ingredients for s’mores – testifies to this trend.
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Brett Kolomyjec has the additional 5,000 square feet of warehouse space to prove it.
His company, Datebox Inc., doing business as Fortunately, grows up, fortunately for him and his owner at 1398 Metropolitan Avenue. Fortunately, with around 65 employees, it moved from a smaller, less functional space last fall.
Fortunately, which started in 2016 and quickly attracted investors, was growing before the coronavirus hit, Kolomyjec said. The pandemic has kept so many people at home and so many eyes on the screens of smartphones and computers, it has really taken off, he said.
“Our product is well placed for people who need to stay at home,” said Kolomyjec. “Date night is the first step” towards “building happiness” for couples, he said.
E-commerce takes up space
Fortunately, he was among the tenants whose arrival or expansion in Oklahoma City last year caused the largest annual drop in the vacancy rate for multi-tenant industrial space in a decade, from 14.9%. at 8.4%, said Chris Roberts, broker at Price Edwards & Co.
“The rapid growth of e-commerce fueled by the pandemic is a significant driving force,” Roberts wrote in the company’s multi-tenant industrial market research, available at www.priceedwards.com.
Medical marijuana operations inhaled industrial spaces, mostly single-tenant warehouses that were not tracked in the investigation, he said. They occupy flexible multi-tenant space that can be moved from a warehouse to an office or showroom as needed, as well as older service warehouses.
But over the past year, it has been e-commerce skyrocketed by the pandemic that has made Oklahoma City “definitely a” homeowner’s market “and, with the exception of major events in the national economy, the market shows no signs of changing for the foreseeable future, ”Roberts reported.
Businesses rent more, on-site and off-site
In addition to Happily, Roberts said, other local users of industrial spaces have grown in the past year:
• Nestlé Purina, 13900 N Lincoln Blvd., leased 87,000 square feet at 3400 S Kelly Ave. to Edmond for additional space to facilitate online orders and store additional inventory due to the pandemic.
• Encore Fulfillment, 3815 N Santa Fe Ave., leased an additional 121,000 square feet at 605 N Tulsa Ave. to complete its main location, with 48,900 square feet.
• Jasco Products, 10 E Memorial Road, with 340,765 square feet, leased an additional 87,184 square feet at 37 NE 122.
• Walmart, with 152,800 square feet at 7501 SW 29, has extended its lease to 65,600 square feet.
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Speculative construction is back
Roberts said construction of speculative warehouses – with no lined up tenants – is underway again, with several projects underway, after a hiatus. Oklahoma City is not alone, he said.
“Industrial companies trying to gain a foothold in the Oklahoma City market have told us that the low industrial vacancy rate and fewer vacant buildings for sale is not just a local phenomenon,” he said.
Price Edwards tracks three types of multi-tenant industrial buildings:
• Bulk warehouses used for logistics, warehousing and distribution of products and materials, with a clear ceiling height of 24 feet or more.
“Given its role in the supply chain, it is no surprise that the bulk warehouse has seen a substantial drop in vacancy rate from 15.59% in 2020 to 8.17% in 2021, the lowest since 2013 4.5%, ”said Roberts.
• Service warehouses, with a clear height of 18 to 24 feet with space at dock height, for tenants typically renting 12,000 square feet of space or less.
“Service warehouses, which include older spaces and those with moderate clear heights, have also experienced a significant reduction in availability with vacancy reaching a low of 7.96% in 7 years,” said Roberts.
• Flexible warehouses, with ceilings with a clear height of 18 feet or less, but including newer properties with higher clearance if marketed as flexible space.
“Flexible spaces, which typically consist of tenants under 12,000 square feet, saw a slight decline from 9.59% in 2020 to 6.47% in 2021,” Roberts reported.
“The modest drop is a reflection of the type of tenants modulating the spaces typically housed with many smaller, service-related businesses that were more susceptible to the pandemic and subsequent closings. ”
Real estate publisher Richard Mize edits the Oklahoman Real Estate section and covers housing, construction, commercial real estate, and related topics for the newspaper and Oklahoman.com. Contact him at [email protected] Please support his work and that of other Oklahoman journalists by purchasing a subscription to http://subscribe.oklahoman.com.