The IFMA Tulsa Chapter September meeting was held on September 27, 2001 at the Ambassador Hotel. Our speaker was Ken Tooman with Tooman Partners, LLC. This was our first meeting of an upcoming series dealing with the CFM core competencies. The core competency covered in this program was Real Estate.
Ken gave us an overview of the state of the Tulsa office market. He covered multi-tenant office buildings in the two main market areas, downtown and suburban. The suburban market is split into five (5) areas. They are Midtown, Skelly, South, East and Southeast. The combined percentage for the amount of space leased in both these markets was 87.4%. The total square feet available for lease in both of these markets was 2,422,676 square feet.
The Tulsa market had been showing a steady increase of net absorption of office space until the CFS downfall. However, the market has been rebounding nicely and the results for 2001 should be positive. In 1999 we had experienced our first negative net absorption in quite some time. We experienced a negative net absorption of 339,576 square feet. However, we rebounded nicely in 2000 with a positive net absorption of 577,047 square feet. The figures for 2001 should continue that trend.
Ken also touched on the rental rates for the downtown and suburban markets. For Class A space in downtown Tulsa, the average price per square for in 2000 was $15.76. For Class B space, the rate was $10.36. For the Tulsa suburban areas, the average price per square foot for Class A space was $16.92 in 2000 and $13.12 for Class B space.
Other topics discussed were major office building transactions in 2000 and the state of the retail and industrial markets. In addition to these topics, Ken addressed leasing versus buying your own facility. Ken indicated that presently it could be a wise investment to buy your own building in Tulsa versus leasing. He gave an example of a 4000 square foot facility going up at 53rd and Lewis that will have an estimated operating cost of $13.88/sq. ft. Compare that with projected occupancy costs of Class A and B space available in Tulsa and it is easy to see how owning could be advantageous.
Ken was asked what kind of lease was typical for office space in Tulsa. The Gross Lease where all operating costs are inclusive was the most prominent. Ken was then asked if landlord concessions/incentives were very predominant. He replied that they hadn't been, but were starting to become a little more prevalent in the Tulsa marketplace. Another question posed was how the terrorist attacks seemed to be affecting the Tulsa market and what was his prediction for the future. Ken indicated that there has been no sign of any kind of effect on the Tulsa commercial market so far. For the future, he's not sure what might happen, but is obviously hopeful that our marketplace won't be affected.
In chapter news, President Brian gave a review of the chapter's participation at World Workplace 2001 in Kansas City. The big news was the announcement that the Tulsa chapter was awarded the 2001 Excellence in Web Communications in the Small Chapter division. Ted Webb also gave a short review of his first time experience at World Workplace.