What area is your expertise?
My specialty is retail investment sales in Oklahoma.
What trends do you see presently in retail development in your area?
The Oklahoma City metropolitan area has experienced minimal local tenant turnover, but for the most part, leasing has stabilized. With the construction of new life style centers, mall tenants and even mall anchors are moving to the new open air developments.
What type of retail product is doing well in your area?
Recently developed shopping centers occupied with national tenants remain the front runner for solid retail investments and, as in most markets, well-located neighborhood centers continue to be successful. Free standing retail is still solid with very few vacancies; however, the verdict is still out as to what fallout the Metropolitan area will have from nationwide store closings.
What retailers are new to your area?
Conn s is the most recent retailer to the Oklahoma City area opening one store with three more planned.
Who are the active retail developers in your area?
Jackson Development, Sooner Investment Group, Blanton Property Co., Burk Collins & Co. and Larry Owsley.
Please name one or two significant retail developments in your area. What impact will these projects have on the market?
The Shops @ Moore is currently being developed by Burk Collins. It s anchored by JC Penney, Ross Dress for Less, Famous Footwear, TJ Maxx, Office Depot and PetsMart.
University North Park is located in Norman at the intersection of Interstate 35 and Robinson. It is currently under development by Sooner Investment Group. The development will include anchor tenants such as Target, JC Penney and Kohl s, along with several other national tenants. A very upscale lifestyle center with tenants to be named is also expected.
The Shoppes on Broadway is located on the northeast corner of 33rd and Broadway in Edmond. The project is being developed by Jackson Development with expectations of mid- to late-2008 occupancies. The redeveloped center will be anchored by Hobby Lobby and Starbucks Coffee.
Dirt work has started for the 232 acre open air lifestyle community called The Village at Quail Springs. It s unknown how much retail will be developed at the site; however, the excellent location will force national retailers to give the site serious consideration.
Where is the majority of the development taking place? Why is this area doing well?
South Oklahoma City and Norman. Both areas are under developed and have good demographics.
What area do you expect to be the next big retail development market? Why?
Norman This will be one of the next big retail markets. University North Park has broken ground and has momentum with several hundred thousand square feet of retail planned.
East Edmond I-35 has been a focal point for planned retail development for the last 2 years. If the economy remains healthy, I m sure a lifestyle center will start in the next year or two.
North Oklahoma City Quail Spring Village developers have made a bold move and broken ground on their development. The verdict is still out to see if they will be able to land retail to make the development a success.
Please describe the retail leasing activity in your area.
New centers are dominated by national and credit tenants paying rental rates between $18 and $35 per square foot. Neighborhood and community centers are occupied by local and regional tenants paying significantly lower rates between $7 and $15 per square foot.
What major leases have been closed recently?
Conn s Appliances recently opened one store at the Midland Center, located on Northwest Expressway and Independence, with two more scheduled to open in the next twelve to eighteen months.
P.F. Chang s China Bistro at Memorial Square, which was recently purchased by Inland, The Cheesecake Factory at Penn Square, Chipotle in Edmond, Albertson s grocery chain sold their Oklahoma stores allowing Homeland and Williams Discount Foods to take over thirteen Oklahoma City metro stores. The Shops at Moore closed several new leases with JC Penney, Ross Dress for Less, Office Depot, T J Maxx and PetsMart.
Please give a measure of retail vacancy rates.
The Oklahoma City metro area consists of seven major markets. North, Northwest, South , Edmond, West-Central, Moore-Norman, Eastern Oklahoma City. The North Oklahoma City markets, the West Central Oklahoma City market, the Moore/Norman market all have occupancy rates in excess of 90 percent and continue to be doing quite well overall.
The East Oklahoma County submarket and the South submarket each have a vacancy in excess of 15 percent. The overall vacancy rate in the Oklahoma City market for year end 2007 was 11.37 percent
What types of retailers should look into your market in the coming year? What type of retail is needed?
University Park North in Norman is bringing in retailers that haven t previously been willing to locate in the Oklahoma City metro area, such as Crate & Barrel, Anthropologie and a gourmet grocer, possibly Whole Foods Market. After the completion of these leases in Norman, north Oklahoma City will benefit from those tenants needing market exposure in other metro areas.
Would you like to make any additional observations about the retail market in your area?
The overall retail market in the Oklahoma City metro area is doing very well, with only a 11.37 percent vacancy rate. New construction is at an all-time high and national retailers are looking at Oklahoma City with renewed interest. National and regional tenants are absorbing space in several large new centers, which could affect the occupancy of neighborhood and community centers. However, as history has shown, the well-located and the well-constructed centers will continue to be successful through good and bad markets. The centers with less desirable locations will experience rental rate decreases and vacancies. With fourteen centers under construction (over 25,000 square feet) local developers are confident with most national tenants perception of the Oklahoma City market.
Most retail shopping center investors in the Oklahoma City market have had a conservative ending philosophy avoiding being over leveraged. The Oklahoma City metro retail market is very stable. I feel the market will weather any threat of a short term recession. The local economy is very solid. With the city s strong foundation from the local MAPS projects to the likelihood of an NBA franchise in 2009, Oklahoma City will continue moving forward.
Submitted by Paul Ravencraft, Investment Broker with Price Edwards & Co. in Oklahoma City, Okla. Posted 03/06/08.