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ECONOMY: UNEMPLOYMENT RATE DOWN IN Q3

Tulsa’s economy has been stable but facing headwinds in early 2025. Statewide
nonfarm employment continues to grow, with Oklahoma’s manufacturing
exports rising 6.6% in the first four months year-over-year.
The unemployment rate decreased 0.2% from Q2 to Q3 2025 to 3.0% (1.3%
below the U.S. rate and down 0.4% year-over-year (YOY). The current
workforce decreased from 489,900 to 478,200 (up 6,000 YOY). Low rents,
energy costs, and taxes help to make the cost of doing business in Tulsa is
lower than the national average.

DEMAND: STABLE INTO Q4 2025

Through the first three quarters of 2025, office demand in Tulsa has remained
muted but stable, characterized by a cautious leasing environment and
selective absorption. While net absorption has been modest, demand continues
to favor Class A and fully renovated space as tenants seek quality and flexibility.
Local reports indicate that office availability has held relatively steady, and
tenant improvement allowances and concessions remain pervasive—
undermining growth in effective rents.
With demand holding stable, asking rents continue to rise, growing 2.0% over
the past 12 months. Market asking rents come in at $18.60 per square foot
(psf), slightly below neighboring Oklahoma City with rents of $20.00/psf.

PRICING: CBD RATES ON THE RISE INTO Q4 2025

The Tulsa total office market experienced a modest $0.02 psf increase in
average rental rates during the quarter, closing at $18.60 psf, representing a
$0.56 YOY gain. The Central Business District (CBD) recorded a more notable
$1.27 YOY increase, reaching $20.63 psf, while the Non-CBD submarket
declined $0.04 from Q2 to $17.43 psf, though still reflecting a $0.07 YOY
increase.
The highest rents are found in the metro area outside of the CBD. The South
submarket has the highest Class A asking rent at $25.68 psf, followed by the
CBD at $22.66 psf.
Market participants report that landlords continue to offer concessions and
tenant improvement (TI) packages, which are dampening effective rent growth
despite nominal rate increases.

ECONOMY:

Oklahoma City’s economy remains strong and steadily growing, supported by a diverse
mix of industries. While energy and the private sector continue to serve as key pillars, the
metro is experiencing rapid expansion in aerospace, technology, and manufacturing, driven
by major investments from companies like Boeing, Skydweller Aero, and Costco. A probusiness
environment, skilled labor force, and competitive state incentives have helped
attract new employers and fuel corporate growth, keeping unemployment low at 3.1%—well
below the national average—and driving job growth that consistently outpaces the U.S.
rate. The city is home to major companies such as Devon Energy, Continental Resources,
Paycom, and Love’s Travel Stops, reflecting a growing presence across energy, finance, and
retail sectors. Population growth has further bolstered the economy, with the metro area
expanding by 18% since 2010—well ahead of Tulsa’s 11%—led by gains in Oklahoma and
Canadian Counties, reinforcing the city’s appeal to both businesses and residents.

DEMAND:

Compared to peer cities of similar size, Oklahoma City’s office market stands out for its
resilience and consistent tenant interest. This strength is largely driven by business-friendly
policies, cost-effective lease rates, and a measured pace of new development. Office
properties in the metro tend to lease more quickly than the national norm, averaging
around 12 months on the market versus over 14 months nationwide. Average asking
rents remain highly competitive at $20.18 per square foot—well below the U.S. average
of $35.93—making the market particularly attractive. Key industries driving this demand
include government, finance, tech, insurance, and energy, with much of the activity
centered in the North and Northwest corridors, where updated buildings and access to
talent are top draws. With its affordability, steady economic base, and lack of overbuilding,
Oklahoma City continues to offer one of the most stable office environments in the
country.

OUTLOOK:

Oklahoma City’s office market is evolving in response to shifting tenant preferences, with
demand increasingly focused on smaller, high-quality spaces—particularly in the North
and Northwest submarkets, which account for roughly 40% of leasing activity due to
their desirable locations. To stay competitive, landlords are enhancing their offerings by
increasing the proportion of building common areas, allowing for more shared amenities
that appeal to today’s tenants. Although vacancy rates remain elevated, steady leasing
activity is being supported by tenant-favorable pricing and more generous tenant
improvement (TI) packages. On the investment side, softening interest rates are narrowing
the gap between buyer and seller expectations, leading to more balanced negotiations
and improved deal flow. Redevelopment opportunities continue to attract investors, with
office-to-multifamily conversions and owner-occupied acquisitions becoming increasingly
common across the metro. As interest rates are projected to continue declining in the
coming months, investment activity is expected to pick up further. Looking ahead, vacancy
is likely to decrease as underutilized office space is repurposed, setting the stage for a
more stable and dynamic market environment.

ECONOMY:

Oklahoma City’s economy remains steady, supported by an evolving mix of industries.
While energy and the private sector continue to be foundational, the metro is experiencing
notable growth in aerospace, technology, and manufacturing, fueled by major investments
from companies like Boeing, Skydweller Aero, and Costco. The city’s pro-business
environment, skilled labor pool, and competitive state incentives continue to attract
new employers and support expansion. The current unemployment rate sits at 3.1%,
outperforming the national average of 4.1%, and year-over-year job growth for Q2 reached
1.5%, also ahead of the U.S. average. The region’s population growth continues to reflect
this momentum, with a Q2 increase of 0.94% compared to the national rate of 0.75%,
resulting in a net population gain of 13,974 residents. Anchored by major employers such
as the State of Oklahoma and Tinker Air Force Base, which together employ over 69,000
people, Oklahoma City remains well-positioned for long-term economic resilience and
opportunity.

DEMAND:

Oklahoma City’s office market shows strong demand and stability compared to
similar-sized cities, fueled by a pro-business climate, affordable rates, and limited new
construction. Office space in Oklahoma City also experiences a shorter leasing cycle,
with an average market duration of 12.5 months compared to the national average of 14.4
months, supported by competitive rental rates of $21.18 per square foot versus $35.57
nationally. Demand is especially strong in the government, finance, tech, insurance, and
energy sectors, concentrated in the North and Northwest submarkets, where updated
spaces and access to skilled talent attract tenants. Together, OKC’s affordability, economic
growth, and disciplined development make it one of the nation’s more resilient office
markets.

OUTLOOK:

Oklahoma City’s office market is adapting to changing tenant demands, with leasing
shifting toward smaller, higher-quality spaces, especially in the North and Northwest
submarkets, which attract 40% of activity due to their prime locations. While vacancy
remains elevated, tenant-friendly pricing and increased TI incentives are helping maintain
steady leasing momentum. Although high interest rates have slowed deal activity, widened
the pricing gap between buyers and sellers, and contributed to declining property values
and higher cap rates, opportunistic buyers continue to invest in redevelopment and owner occupied
properties. Looking ahead, vacancy rates are expected to decline as more office to
multifamily conversions take place, signaling a positive path toward market stabilization
and renewed growth.

ECONOMY:

Oklahoma City hosts a number of prominent companies, including Fortune 500 leaders
Devon Energy, Continental Resources, and Love’s Travel Stops, along with Fortune 100
tech firm Paycom. These key players in energy, retail, and technology showcase the city’s
expanding and diverse economy. While energy continues to be a foundational industry, OKC
is experiencing strong growth in aerospace, technology, and manufacturing, with major
expansions from companies like Boeing, Skydweller Aero, and Costco.
The city’s favorable business climate, highly skilled workforce, and economic incentives—
such as the Strategic Investment Program offered by the Oklahoma City Economic
Development Trust—make it an attractive destination for employers. As a result, OKC
consistently posts an unemployment rate below the national average. Population growth in
Oklahoma and Canadian counties has also driven an 18% increase in the metro area since
2010, outpacing Tulsa’s 11%.

DEMAND:

The Oklahoma City office market continues to fluctuate , with rising vacancies and
fluctuating interest rates contributing to a cautious environment. As tenants continue to
downsize—averaging around 2,500 square feet—larger office spaces are staying on the
market longer than in the pre-pandemic era. Still, vacancy rates and average asking rents
remain ahead of national averages, as seen in Q1 2025.
Demand is holding steady, particularly in the finance, tech, insurance, energy, and public
sectors, which are largely concentrated in the North and Northwest submarkets. These areas
account for over half of all leasing activity, thanks to a strong mix of options, easy access,
and proximity to affluent, highly educated neighborhoods. Meanwhile, older buildings—
especially those constructed before 1980—are seeing increased vacancy, as tenants favor
modern, updated spaces with various amenities. The Northwest & Midtown submarkets lead
in new development, with 115,000 square feet of office space currently under construction.

OUTLOOK:

Oklahoma City’s office market continues to favor tenants, with rising inventory and stagnant
demand keeping rent growth flat. Slow absorption has led landlords to offer increased
tenant improvement packages—nearly double pre-pandemic levels—and added concessions
to drive occupancy.
Weakened demand and high interest rates have further slowed deal activity, widened the
pricing gap between buyers and sellers, and contributed to declining property values and
higher cap rates. As supply continues to grow and demand remains inconsistent, landlords
are increasingly open to negotiations, leading to modest gains in an otherwise cautious and
evolving market.