Real Estate: Residential Commercial Industrial

Real Estate

By Trey Hopkins, McGraw Realtors; with support from Curt Roberts, Julie Buxton and Gannon Brown of McGraw Realtors

Retail

When COVID-19 forced shutdowns around the world, many saw this as the death knell to a brick-and-mortar retail sector that was already losing ground to e-commerce pre-pandemic. To be sure, bank and retail pharmacy sites have remained largely dormant in 2021 with the massive shift to online banking and prescription services.

However, Tulsa’s retail market overall is doing relatively well, with a 95% occupancy rate and retail sales on the rise. According to CoStar data, once the initial shock of the pandemic began to fade, retail sales have rebounded and are trending above pre-pandemic levels. The high occupancy rate has meant a slowdown in leasing activity in the sector with retail leasing activity falling, “15% compared to the five-year average in Tulsa,” which is significantly better than the national average decline of around 36%. Construction through the third quarter has slowed, with most new construction coming in the form of build-to-suit retail and restaurant projects. Curt Roberts with McGraw Realtors keyed in on this trend as being a significant departure from past market trends as new construction favors smaller, build-to-suit pad sites over big box stores — the latter seeing new construction remain dormant in the wake of the pandemic. Roberts also noted that vacancy in big box retail space has been filled by the burgeoning medical marijuana industry and its need for large, open space for its operations. The CoStar market report noted that, “Prior to the recession, investment activity accelerated, and annual volume averaged close to $250 million over the past five years.” Though one would expect the prolonged pandemic and recession to cool investment, the report continues, “Despite deteriorating conditions in the retail segment, Tulsa logged the best year for investment on record at $326 million.”

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A group of the 700-member McGraw team in Tulsa includes, left to right, Bob Haywood, Scott Crow, Chris Swift, Debbie Schreppel, Lindsey Schlomann, Holli Woodward, Rachel Hicks, Curt Roberts, Kathy Stacy, Anita Hurd, Heidi Williams, Jeremy Brittenham, Jennifer Richard, Amy Bors, and Bill McCollough, President/CEO.

McGraw REALTORS® has been serving Tulsa and northeastern Oklahoma real estate needs since 1938. What started as an independent residential real estate company helping Tulsans find a place to call home has become the state’s largest independent real estate company with 20 offices across Oklahoma, Arkansas and now Colorado! We are a truly full service brokerage, and are able to meet any and every real estate need.

Residential real estate

With over 700 active residential agents, we are still dedicated to helping current and future Tulsans find a place to call home. We want to make real estate simple for our clients so they can have confidence during one of the largest transactions they will make in life. Our years of experience, innovative technology, and our collaborative network of industry professionals that know and love this city help us take the complexity out of the entire process. Visit mcgrawrealtors.com.

Relocation services

Through our Relocation Services division, McGraw REALTORS® can take the headache out of relocating in or out of the Tulsa metro area. Our Relocation Services division can help you make your corporate transition smooth whether you are moving into the city or to a new region. With McGraw REALTORS® network of agents in Tulsa and connections to firms across the country, we can connect your company and employees with the right agent no matter your destination. Visit mcgrawrealtors.com/relocation.

Residential property management and leasing

Through our Residential Property Management division, we have spent years serving property owners and investors by finding the right tenants for their investment properties. With more than 991 units under management our team handles the leasing process and daily maintenance tasks associated with owning investment property. We also are able to serve renters, for whom an apartment may not be suitable but aren’t in a position to buy a home, by connecting them with great property owners. Visit mcgrawpropertymanagement.com.

Commercial real estate

corporations and business owners buy and sell their properties. From the large, industrial manufacturing plant to a start-up’s first storefront space, our expert team of commercial real estate agents has the knowledge and experience to remove the headache from your company’s next move. Visit mcgrawcp.com.

Multifamily Team and Winfield Property Management

For investors in the multifamily sector, McGraw’s Multifamily Team together with Winfield Property Management offers a one-stop shop for buying, selling and managing assets. The Multifamily Team has helped investors across the region increase their holdings, and provided immediate access to the top-rate services of Winfield Property Management, a Tulsa-based property management company that merged with McGraw REALTORS® in 2019.

Winfield has been serving multifamily investors and their tenants with dedication and excellence for over 15 years, and currently has 4,041 units under management. Together, the Multifamily Team and Winfield Property Management are able to assist investors from beginning to end of the multifamily investing process. Visit winfieldliving.com.

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Office

The market segment with the greatest disruption since the start of the pandemic has undoubtedly been the office sector. In one sense, Tulsa’s office leasing is a mixed bag with vacancy rates downtown hovering around 20% while suburban office buildings are filled and experiencing increased demand. The meteoric rise in work from home has remained prevalent throughout 2021 and the 12-month net absorption in square footage is over 614,000, according to data from CoStar. However, Roberts has observed a sharp increase in the demand for smaller spaces in Tulsa’s suburban areas. “A new, two-story building is filled months before construction is completed while high-rise complexes are feeling the full weight of the shift in modern work culture,” Roberts said.

The downturn in energy also has been a driving force in the high vacancy rate, with WPX’s merger with Devon Energy and the subsequent headquarters move to Oklahoma City. The CoStar market report strikes a more positive note, observing the “relatively stable” health care and education industries helping keep the Tulsa economy in check when energy is more volatile.

Industrial

One of the brightest spots in the Tulsa commercial market is the industrial sector, which has done the best of all, boasting just a 3.4% vacancy rate — an all-time low. In fact, 2021 saw a rent rate increase of 6%, likely the byproduct of two key factors: the growth of the medical marijuana industry and the supply chain crisis making new construction of industrial facilities relatively unfeasible. The rise of the medical marijuana industry has created a need for often overlooked and underused warehouse space. Coupled with the recent investments that companies like Amazon, Whirlpool and Sofidel have made in the Tulsa market, the industrial sector is experiencing a sort of renaissance in Tulsa. CoStar’s market report notes, “Investment activity in Tulsa for industrial assets has continued to rise year-over-year since 2018,” with the momentum continuing through 2021. Warehouse and distribution facilities aimed at serving the broader region have played a major role in this investment.

The medical marijuana boom has benefitted the industrial and retail real estate sectors.

Multifamily

The multifamily sector has seen its share of ups and downs since the onset of the pandemic but moves into 2022 on a relatively high note. Though initially staggered by the eviction pause in 2020, new and newer complexes are still maintaining an extremely low vacancy rate that looks to remain stable with relatively little new construction taking place. Rent has also seen a marketed increase of 3.4% throughout 2021 with effective rent up 10%, the highest rate of growth coming from this last quarter. As CoStar notes, “Healthy leasing and rent appreciation have attracted investors to Tulsa,” which has allowed the sector to remain resilient, “enticing greater sales activity in 2021 as the economic recovery continues.”

Looking ahead

Speaking to his observations of the Tulsa Commercial real estate market’s trajectory in 2022, Curt Roberts said, “Overall, Tulsa has a lot to be optimistic about. The greatest concern is the high vacancy rate in the downtown office space, and we will have to wait to see how everything settles as we move further into a post-COVID-19 world. South Tulsa is still growing, and the population growth in Broken Arrow is still creating opportunities for investment and growth.”

Residential real estate

For all the uncertainty and chaos wrought by the COVID-19 pandemic, the residential real estate market has thrived in Tulsa. Gannon Brown with McGraw Realtors noted, “Most predictions I’ve seen for 2022 have Tulsa maintaining much of the momentum we have had going on two years now.”

Driving this sustained growth in the residential real estate market is the continued low supply of new construction homes, historically low interest rates, and the fact that Tulsa continues to offer affordability with a growing number of big city amenities that are attractive to out-ofstate buyers.

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MULTIFAMILY | OFFICE | RETAIL & RESTAURANT | INDUSTRIAL | LAND | PROPERTY MANAGEMENT 4105 S. Rockford Avenue | Tulsa, OK 74105 | (918) 388-9588 | mcgrawcp.com

Waterstone Mortgage

The purchase of a home is often the largest investment a person or family will make in their lifetime. The team at Waterstone Mortgage works to deliver the best mortgage experience possible, guiding customers and offering resources to determine which of the company’s unique mortgage programs is the best fit.

“Housing will remain strong in 2022 with demand slightly softer due to a rise in interest rates, but still robust,” said Kerrick Draper, Waterstone’s Tulsa Branch Manager. “The forecast for the year is for mid to high single-digit appreciation, still providing a great wealth creation opportunity for real estate buyers.”

Waterstone Mortgage was named to Scotsman Guide’s “Top Mortgage Lenders” list for loan volume in 2020. It was the fifth consecutive year the company made the prestigious list. More than 17,200 individuals and families financed the purchase of their dream home, reduced their mortgage payment, or cashed-out some equity to consolidate debt with Waterstone in 2021.

“When it comes to stability, program variety, and timely closings, we have all the tools home

Sitting left to right: Briza Turrubiartes, Kerrick Draper, Roberto Arellanes

Standing left to right: Joey Scott, Ronda Perkins, Valdemar Sanchez, Dora Quinones, Patty Chumbley, Mike David, Teresa Eisenman, April Wright, Jessica David, Tanya Dickinson, Meg Godwin

Not pictured: Kendall Basore, Kim Atzbach

buyers need to achieve their dream of home ownership,” said Draper. “Mortgage loans are not a one size-fits-all. We offer a wide variety of loan products, along with a skilled and professional staff which assures we excel at matching clients with the right loan program. We are local experts delivering a better experience.”

Waterstone Mortgage is located at 5705 E. 71st Street, Suite 100, in Tulsa. Call 918-236-2951 or visit Waterstone-Tulsa.com.