BGI Broken Arrow Business Park offers a well-located, income-producing investment opportunity in the growing city of Broken Arrow, Oklahoma. Broken Arrow is the fourth largest city in the state of Oklahoma and is part of the Tulsa Metropolitan Area boasting just under 1 million residents. The property is a one-minute drive (0.25mi) from the heavily trafficked Highway 169 (106,209 vehicles per day) with high visibility and frontage on Albany St. (aka 61st St.). The immediate intersection continues to improve with new construction to include the latest generation QuikTrip built on the northwest corner and a new Class A medical/retail center directly to the north of the adjacent McDonald’s. The total net rentable square footage of the property is 88,707 on a 6.08 AC parcel of land. The unit mix is divided into uses such as 42,870 NRSF of Retail/Retail Warehouse, 20,600 NRSF of Office/Office Warehouse, and 25,237 NRSF of Storage.
The Business Park, built in 1986, due to its proximity to Tulsa, is in the Southeast Tulsa Submarket. In 2021, rental rates for flex space in this submarket have hit their highest number within the last 12 years and analysts are projecting those numbers to continue to rise with an average rental increase above 3% over the next five years (per CoStar Southeast Tulsa Industrial Market Report). Occupancy of similar properties in the area is 97.3% which provides an opportunity for the subject property to continue to boost tenancy beyond its current economic occupancy of 64.79% with a more focused leasing approach. As a result, the Net Operating Income of $285,209 is projected to rise to $492,571 by Year 5 with a conservative estimate of an increased economic occupancy rate of 83%.
The property represents an excellent opportunity to acquire an asset with considerable upside. By enhancing the leasing marketability and maximizing the management efficiencies, it’s projected that Cash-On-Cash Returns currently at 9.2% in Year 1 would nearly double by Year 5 at 17.4% and continue to increase to 24.4% at Year 10.