Spartan
01-23-2017, 06:50 PM
Thought I'd start a thread to discuss OKC apartment development, macro-speaking, for which I came across a great resource (local brokerage newsletter): http://www.crrc.us/aptreports/2016AptReport.pdf
I'd say in terms of the nation, OKC's market is more attractive than you'd think. I am seeing some surprisingly low cap rates on Class A deals that I don't even see in comparable markets that aren't nationally known for being hot. I saw 5 and a half on one MF project at Memorial/Rockwell and had to pick my jaw up off the floor; I'm sure there are even lower in better locations. Would love to see if anyone else has seen other deals that low.
From Page 4 of that newsletter - one outdated property - Wedgwood Village - closed for $68K, a strong validation of location premium in OKC. Such outdated properties typically sell for under $50K in "cheap" markets like Tulsa, Wichita, Omaha, Mobile, Memphis, Dayton, Grand Rapids, etc. Also very notable is that the avg sale price per unit for Class A MF is north of $100,000, which is often seen as a clear dividing line between low-cost and medium markets. Even better that it's been sustained over $100K since 2012, when it shot up.
Even more intriguing are the implications of all of this for center city development. As the market starts bearing higher costs in stride, that makes it easier to go into higher-cost sub-markets like the urban space. Secondly, as metro-wide deals become more sophisticated, soon enough your apartment project out on Council or Rockwell is rocking the same vibe and competitive amenities package as a downtown deal. Think of it all as a virtuous cycle now that OKC is becoming a more expensive city, which is going to solve a lot of the wicked problems many of us hash out constantly, ie., why can't they build taller, better, bigger, etc...
Obviously MF development is a major opportunity for OKC with the disproportionate market share that SF housing already has, the rising attraction to renting, and the fact that transplants will be more accustomed to apartment living. If OKC really wanted to leverage this new development trend for planning objectives, a BRT corridor along NW Expwy or Memorial or some other apartment corridor would instantly attract some very attractive development. It could leverage urban, middle, and suburban demand.
I'd say in terms of the nation, OKC's market is more attractive than you'd think. I am seeing some surprisingly low cap rates on Class A deals that I don't even see in comparable markets that aren't nationally known for being hot. I saw 5 and a half on one MF project at Memorial/Rockwell and had to pick my jaw up off the floor; I'm sure there are even lower in better locations. Would love to see if anyone else has seen other deals that low.
From Page 4 of that newsletter - one outdated property - Wedgwood Village - closed for $68K, a strong validation of location premium in OKC. Such outdated properties typically sell for under $50K in "cheap" markets like Tulsa, Wichita, Omaha, Mobile, Memphis, Dayton, Grand Rapids, etc. Also very notable is that the avg sale price per unit for Class A MF is north of $100,000, which is often seen as a clear dividing line between low-cost and medium markets. Even better that it's been sustained over $100K since 2012, when it shot up.
Even more intriguing are the implications of all of this for center city development. As the market starts bearing higher costs in stride, that makes it easier to go into higher-cost sub-markets like the urban space. Secondly, as metro-wide deals become more sophisticated, soon enough your apartment project out on Council or Rockwell is rocking the same vibe and competitive amenities package as a downtown deal. Think of it all as a virtuous cycle now that OKC is becoming a more expensive city, which is going to solve a lot of the wicked problems many of us hash out constantly, ie., why can't they build taller, better, bigger, etc...
Obviously MF development is a major opportunity for OKC with the disproportionate market share that SF housing already has, the rising attraction to renting, and the fact that transplants will be more accustomed to apartment living. If OKC really wanted to leverage this new development trend for planning objectives, a BRT corridor along NW Expwy or Memorial or some other apartment corridor would instantly attract some very attractive development. It could leverage urban, middle, and suburban demand.