Revitalizing Urban Centers: How Oklahoma City and Others Defy the Office Vacancy Trend

As of June 2024, vacancy rates for office buildings in the United States averaged 18.1%, up from just 11.4% as of December 2019 and just 10% in downtown areas. We have heard this trend of businesses vacating their main offices for remote work or downsizing into the suburbs for hybrid options for a few years now and know it can lead to several problems.

Cities with struggling downtowns can experience increased crime rates, economic decline, job losses, reduced vibrancy, and increased urban sprawl. These issues can lead to additional businesses fleeing the downtown areas and cause a spiraling effect. Yet, some cities have recovered their downtown areas nicely.

According to a study by the University of Toronto, cities like Miami, Phoenix, Oklahoma City, San Jose, Las Vegas, and Wichita have recovered at least 90% of their downtown activity since 2019. The study tracked foot traffic using cell phone data from unique visitors. What factors contributed to their success, especially when many other cities are still working to achieve similar results? Additionally, what strategies can cities implement to retain their businesses?

The answer is somewhat complicated. Several factors go into tracking this kind of data — and while that data is being considered, keep in mind that much of this blog is anecdotal. Take Miami for example. Corporations have been steadily moving to Miami for over a decade. It is the second largest city in Florida, one of the most tax-friendly states for older workers. Miami also has a vibrant nightlife, culture, and great food (not to mention access to the beach). People vacation here. Of course, foot traffic has recovered.

Similarly to Vegas, Miami has much to offer outside of working and living.  One could make that same argument for cities like San Jose and Phoenix.  So, what about cities like Oklahoma City? How has a city with limited tourist activity recovered over 90% of its downtown foot traffic while many other locations continue struggling with the problem?

Again, several factors are in play, but fiscal responsibility and sound incentive programs certainly helped OKC keep its downtown life intact. By May 2020, Oklahoma City reopened an economic incentive program designed to assist small city businesses recover from the hit of the pandemic. After receiving 600 applications in just 11 days, the city committed to $5.5 million in funding and technical assistance for their local businesses. Keeping these companies afloat during the tumultuous pandemic helped keep the downtown pulse beating and position OKC to resume hosting several conferences and conventions in 2021.

Oklahoma City also practices shrewd financial investing. They do not overspend, and they deploy their capital wisely. The city maintains an AAA bond rating, allowing them to sell bonds at the lowest possible interest rate. Revenue from said municipal bonds helps fund the city’s Metropolitan Area Projects (MAPS) 4 projects, which aim to improve the city’s infrastructure. Oklahoma City has expanded on its 30 years of success with the MAPS program and recovered over 93% of the 2019 downtown foot traffic. Through a combination of targeted economic support, prudent financial management, and strategic infrastructure investments, Oklahoma City has not only weathered the challenges of the pandemic but has also reinforced its position as a vibrant and resilient urban center.

The recovery of downtown areas in various cities, including Oklahoma City, underscores the critical importance of adaptive strategies and targeted investments in overcoming the challenges posed by the pandemic and shifting work trends. While cities like Miami and Las Vegas benefit from their inherent attractions and vibrant lifestyles, the success of Oklahoma City highlights how fiscal discipline, effective economic incentive programs, and strategic infrastructure projects can play a pivotal role in revitalizing urban centers. By balancing prudent financial management with robust support for local businesses and infrastructure enhancements, cities can not only rebound from economic setbacks but also lay a strong foundation for long-term growth and resilience.

As urban areas continue to navigate the evolving landscape of work and commerce, these examples offer valuable insights into the multifaceted approaches that can help sustain and invigorate downtown life. As we reflect on the successes of cities like Oklahoma City, it’s clear that a combination of strategic planning and community support can lead to thriving urban centers.

If you’re interested in exploring how these strategies can be applied in your client’s city or would like to discuss tailored solutions for their business, don’t hesitate to reach out to our Location Advisory Services team.