By Barbra Murray, Contributing Editor
Investment activity is not precisely brisk in Tulsa, Okla., so the recent trade of Warren Place I & II, a 960,000-square-foot office complex, turned heads. Parmenter Realty Partners sold the property to Rosemont Realty L.L.C., and both buyer and seller are remaining mum on the price tag.
It?s a transaction you just won?t see every day in Tulsa. ?Our Class A office market is really pretty limited, there are maybe 10 properties throughout the whole metro area that would even qualify as Class A,? Owen S. Ard, associate managing director with real estate consulting and valuation firm Integra Realty Resources Inc., told Commercial Property Executive.
Warren Place I & II sit within the 52-acre Warren Place complex and have been a part of the Parmenter portfolio since 2005, when the company acquired the buildings through the closed-end Parmenter Realty Fund II for, according to reports at the time, $72.5 million. Developed in 1983, the 20-story Warren Place I features more than 466,200 square feet. Warren Place II came along in 1987 and at nearly 487,100 square feet, the 19-story tower is the largest suburban office building in the State of Oklahoma.
The transaction marks Rosemont?s entr?e into the Tulsa office market. ?Tulsa?s fast growing energy and natural gas sectors along with its increasingly diverse local economy makes this a compelling investment opportunity,? Daniel Burrell, CEO of Rosemont, said in a prepared statement.
And the jobs market is faring relatively well, too. At 5.2 percent in September, Oklahoma?s unemployment rate was the fourth lowest in the country, according to the U.S. Bureau of Labor Statistics. ?There are a lot of oil and natural gas services providers so overall, our economy is fairly stable,? Ard said. ?And that [Tulsa office] submarket is fairly small and stays pretty well occupied because rents have achieved a place where there won?t be a lot of new competition.? The Warren Place buildings have an average occupancy level of 96 percent.
It remains to be seen how the Warren Place transaction impacts the greater investment community; perhaps Tulsa will move up higher on the shopping list. ?There are a handful of buildings that would attract a regional or national investor and you can buy things cheaper than in other regional primary markets like Dallas or Houston,? Ard noted. ?Overall, cap rates have been 50 to 100 basis points higher but, put [the Warren Place] buildings in Dallas and you?re going to kick out? a cap rate that?s at? least 100 basis points lower.?
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