By Stuart Graham, Senior Vice President, CBRE; Mark Inman, Senior Vice President, CBRE; and Kendra Roberts, Associate, CBRE
The Oklahoma City retail market has had a growing and changing landscape over the past few years as the sector’s healthy fundamentals continue to draw both local and national investors. Although much of the growth has been focused on the downtown Oklahoma City area, we are beginning to see a new hotspot emerge in the Far North neighborhoods.
Stuart Graham, CBRE
High-quality schools and affordable housing in the Far North Oklahoma City submarket of Edmond, as well as in the surrounding neighborhoods, have been major draws for young families. Both the Deer Creek and Edmond School Districts rank among the top three school districts in the state and also enjoy high national rankings.
As a result of these residential and educational features that are attracting younger households and driving population growth, the Far North Oklahoma City submarket has recently seen a significant uptick in both retail investment and development activity that better support this underserved and growing
community.
To illustrate this submarket’s rise, consider the fact that nearly 20 percent of the total volume of retail product currently under construction in the Oklahoma City area is located in the Far North submarket of Edmond. This submarket was also the recipient of more than 50 percent of the total retail investment sales activity for the first quarter of 2020.
Mark Inman, CBRE
The presence of top-rated school systems alone has drawn homebuyers to the edge of Oklahoma City’s metropolitan area. But the historically moderate land costs in Far North Oklahoma City have also called to housing developers, allowing them to assemble large tracts that can be developed into well-planned communities with family-friendly amenities at affordable prices.
In addition to seeing strong residential growth, the Far North Oklahoma City submarket is also benefitting from upgraded infrastructure.
In years past, submarkets on the northern outskirts of Oklahoma City previously saw growth deterrents due to commute concerns. However, city improvements to State Highway 74 and the widening of the Kilpatrick Turnpike have made access to the downtown area much easier for those living in the Far North.
This poignant combination of residential population growth and improved infrastructure is translating to elevated demand for retail space, on both the leasing and investment fronts.
According to data from Real Capital Analytics, in the first quarter of 2020, Oklahoma City saw approximately $12 million in retail investment sales volume. Of this amount, almost $7 million was concentrated the Edmond submarket. And despite the impact of the COVID-19 pandemic, we continue to see signs of larger projects and outside capital being drawn to the strong growth of the Far North Oklahoma City retail market and the opportunities to be had here.
Kendra Roberts, CBRE
For many years, the southern boundary of the Far North submarket was the “Quail Springs Corridor”— a thoroughfare that houses a 1.1 million-square-foot regional mall and a significant amount of peripheral retail space for the trade area. This corridor has traditionally serviced the retail needs for most of North Oklahoma City.
Over the past decade, however, developers have added a number of small strip centers to the local supply that have serviced the Far North region. Yet we have not seen construction of new grocery-anchored or big box retail product outside of the Quail Springs Corridor.
That said, fast food, small retail, fuel stores, medical services and banks are all examples of retail users that are very active in the Far North submarket right now. We are beginning to hear rumblings about new grocery tenants investing in the area as well.
So far, most of the investment capital we have seen has been from smaller, local buyers, but all indications point to some large retail deals landing in this area in the coming months.
In terms of development, we are fielding requests for developers and showing site plans for grocery and small box retail for the first time during this cycle. All of these site plans include outparcels along the major arterials of the region. Today, the most aggressive activity and user demand involves site pads, but we are also seeing preliminary interest from grocery and other smaller box store investors.
It is encouraging to see that inquiries have not really slowed despite of the current environment. For several years, the main chatter in Oklahoma City retail has been about the activity in Midtown and closer to the urban core. All the while, there has been consistent and steady growth in many of the outlying areas of Oklahoma City, particularly in the Far North submarket — it has just been a quieter kind of growth.
In summation, we believe that the future and fortunes of the Far North Oklahoma City submarket are ultimately still tied to traditional fundamentals and demand drivers, and that the age-old expression of “retail follows rooftops” is still highly applicable to this region.
Consequently, we anticipate that the need for quality retail space will only continue to grow as more families head north.
— This article originally appeared in the June issue of Texas Real Estate Business magazine.