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TABLE OF CONTENTS FEBRUARY 2017 3 6 9 12 SQUAREFE E FebruaryT 2017 HOLD THOSE ROOMS Expert recommends delaying some hotel FEATURES development projects Edmond retail investment continues to soar 3 CREC 2017 FORECAST INFO INSIDE Brokers express guarded optimism for 2017 6 ABOUT THE COVER: Bricktown hotel Hold those hotel rooms: Expert recommends delaying development. 9 some hotel development projects Photo by Brent Fuchs Rise in interest rates doesn’t set off alarm - yet 12 15 OTHER SQUARE FEET is a 18 Top Projects publication of The Journal Record 20 Big deals: produced quarterly 20 Industrial 22 Office Oklahoma City Office: 21 Multifamily 23 Retail & other 101 N. Robinson Ave., Ste. 101, 24 Ask the industry Oklahoma City, OK 73126 405.235.3100 25 Properties for sale or lease For subscription information, 28 Sales Points call (800) 451–9998 or go to JournalRecord.com. SQUARE FEET • TABLE OF CONTENTS 1 EDMOND RETAIL INVESTMENT CONTINUES TO SOAR Covell shopping center under construction. Photo by Brent Fuchs Michael Rapella, at left, and Caleb Hill stand on the construction site of the Market Square at Covell Village shopping center. Photo by Brent Fuchs BY MOLLY M. FLEMING center. “Two years ago (2014), it was our top corner,” she said. EDMOND – Zerby Interests Principal Caleb Hill said “It’s stayed up there. It’s continued to be our top corner for the company bought 2.5 acres near W. Covell Road and private investment.” N. Kelly Avenue in 2016. He and his development partner In 2015, there was more than $6 million in private Michael Rapella saw a lot of money put into the area. Last potential in the area. year, the total reached more “There’s definitely a regional “I think it’s just natural than $7 million, which includes draw, with people coming Zerby’s project. from south Guthrie,” he said. that retailers want to go “We knew when we put in “Because of Mitch Park and where the incomes are,” the largest competition pool in what it has created, and what the state, we knew it would the city of Edmond has built ... “Edmond and Moore bring in tournaments, with the there, (the park) is enhancing ballfields and lacrosse,” she said. the trade area. This area has would be those areas “The private investment has just taken off because of Uptown right now, and we’re shot up at that intersection.” Grocery and the (Mitch Park Zerby is building 22,000 YMCA project).” continuing to see growth square feet on the west side Edmond Economic in the retail area.” of Uptown Grocery. It has Development Authority eight retail spaces, with one Executive Director Janet Yowell — George Williams, on Price Edwards & Co.’s 2,400-square-foot vacancy. The said it was really Lowe’s Home retail investment team other spots are filled by Pie Improvement that started the Five, Roxy’s Ice Cream, Red retail development at Kelly Wing Shoes, All About Cha, and Covell. The store opened Shangri La Nails, Pure Barre in 2008, just as the city was finishing making Kelly into a and Three Dog Bakery. parkway. Uptown Grocery’s Hank and Susan Binkowski Hill said the company does not have a particular followed with Uptown Grocery and the adjacent retail strip retailer in mind for the empty space. SQUARE FEET 3 “We’re trying to be patient to get the right tenant for a He said the center, which is across the street from Spring good co-tenancy balance,” he said. Creek Plaza, is the No. 1 location for soft-good retailers The Garage Burgers and Beer is also leasing land space looking for a higher-end clientele. from Zerby and building a new restaurant. This will be Spring Creek Plaza could be sold to Poag Shopping the Hal Smith Restaurant Group’s second Garage store in Centers. A zoning application was recently approved for a Edmond. mixed-use project with 250,000 square feet of new retail and The new retailers will open by this summer, Hill said. restaurant space, as well as 300 luxury apartment units. The center’s sidewalks will be connected to the city’s Williams has also seen interest grow in the center at E. sidewalks, making it easily accessible to walkers. 33rd Street and S. Broadway. Price Edwards leased a space Red Coyote Running and Fitness is the most recent to Tuesday Morning last year. retailer to open in the area. The store’s first weeknight run “We’re getting some interest from natural soft-goods attracted about 100 people. Hill said he sees this second store tenants to go in there,” he said. “The T.J. Maxx is one of the as a good indicator for the area. The original Red Coyote is highest-performing in the region.” in Classen Curve. Price Edwards is also handling the leasing at the Shoppes But Kelly and Covell isn’t the only Edmond intersection at Fox Lake, at Interstate 35 and E. Danforth Road. Fred attracting retail investment. The Bryant Square shopping Mazaheri purchased the uncompleted center in 2015. Chick- center at S. Bryant Avenue and E. Second Street has Fil-A and Taco Bell have already started construction on had more than $10 million in renovation work by owner the pad sites and Buffalo Wild Wings is open. The center is InvenTrust Properties Corp. The company purchased the 65-percent occupied with medical-related tenants. center in 2014. “We expect to get that center full by the end of the year,” The center’s renovation and new tenancy isn’t complete Williams said. yet, Yowell said. PDQ Chicken, Torchy’s Taco’s and Five He said he’s been working on Edmond retail leasing for Guys Burgers will move in there as well. about three years. The city is the preferred suburb for the South of Bryant Square, George Williams is handling metro, he said. leasing at the Spring Creek Village center. He’s on Price “Local tenants know that the income is higher and the Edwards & Co.’s retail investment team. market is really good in Edmond,” he said. He helped secure Rustic Cuff as a tenant. There’s still plenty of retail room in the city of Oklahoma “They are a good addition to the center,” he said. “We’re City, though. getting a lot of interest in some other vacancies. We’ve “I think it’s just natural that retailers want to go where had some natural turnover with some other locally owned the incomes are,” he said. “Edmond and Moore would be tenants.” those areas right now, and we’re continuing to see growth Bryant Square shopping center.