Warehouse users, brokers and developers didn't hit the Jake Brakes with interest rates rising, but they did ease up on the accelerator.

That's according to, well, just about everybody who's been paying attention. Oklahoma City brokerage NAI Sullivan Group just came out with some detailed stats showing it here. Considering the boom in speculative construction lately, the numbers are worth noting, but not panicking over.

Why it matters: Industrial tenants that manufacture things usually hire lots of people. Even warehouse distribution centers mean more trucks coming and going, which means more truck fueling and servicing and more drivers buying food and convenience items. General economics stuff.

The industrial property market in Oklahoma City was resilient even as commercial real estate slowed in general in 2022, but "it is still under-preforming compared to 2021," industrial specialist Zac McQueen said in a year-end report.

Negative absorption defined most of the year, he wrote, with 177,370 square feet of space gone dark in the fourth quarter. In other words, that much more space went vacant than was leased, or "absorbed," by tenants in October-December.

Absorption was negative three of the four quarters of 2022 after a streak of positives from the third quarter of 2019 to the first quarter of last year — right through the worst of COVID-19, and then some.

The year ended with vacancy still low and rents rising to $8.20 per square foot per year, up from $7.60 at the end of 2021, and way up from $5.95 at the end of pre-pandemic 2019.

The top-performing geographic sector may be a surprise to some folks: Edmond, which isn't generally known as a hotbed of industrial activity.

But it's not a surprise to those of us who drive S Kelly Avenue and the area in general where Edmond meets the north Oklahoma City industrial district around N Santa Fe Avenue and N Lincoln Boulevard. Edmond ended 2022 with the lowest vacancy and the highest rent, $8.75 per square foot.

Of course, Edmond doesn't have a lot of industrial property compared to the rest of the metro area. At the other rent extreme, McQueen said, was industrial-heavy west Oklahoma City, at $6.74 per square foot.

The main industrial story of 2022 — resulting in more coverage by The Oklahoman than usual — was the sheer amount of construction, much of it speculative, meaning the buildings were financed and built without tenants lined up. Spec construction was at around 3 million square feet last fall, right at half the total for the year.

Most of the new stuff is for distribution, not manufacturing, and McQueen said that bodes well for Oklahoma City. Demand remained strong for the newest and best distribution space, which he said had positive net absorption of 497,000 square feet for the year.

"Given OKC’s geographical location, low unemployment, and logistic accessibility, it is poised for a huge amount of growth in the logistics industry in the coming years," he said. "The overall economy began to contract in 2022 due to supply chain issues, geopolitical pressures, and record inflation, with many experts predicting a recession in 2023.

"Despite this, the Oklahoma City industrial market has demonstrated its staying power. Oklahoma City continues to stay below the national average for unemployment, and with the oil and gas industry performing well and the rise of distribution space in OKC, we expect the industrial market to continue to weather the storm."

Senior Business Writer Richard Mize has covered housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Contact him at rmize@oklahoman.com. Sign up for his weekly newsletter, Real Estate with Richard Mize.

This article originally appeared on Oklahoman: NAI Sullivan Group: OKC warehouse distribution market coasts into 2023