• Abstract and Figures
• Public Full-text

Oklahoma City 2018 Mid-Year Retail Market Summary TABLE OF CONTENTS Retail Market Summary 1-2 Quick Hits 4-5 North Submarket 6-7 Northwest Submarket 8-9 South Submarket 10-11 Edmond Submarket 12-13 West-Central Submarket 14-15 Moore / Norman Submarket 16-17 Eastern OK County Submarket 18-19 Retail Investment Sales 20 Submarket Map 21 The information contained herein has been obtained from reasonably reliable sources. Price Edwards & Company makes no guarantee, either express or implied, as to the accuracy of such information. All data contained herein is subject to errors, omissions and changes. Reproduction in whole or in part, without prior written consent is prohibited. Oklahoma City 2018 Mid-Year Retail Market Summary THE RETAIL MARKET The Retail Market sales increased 4.4 percent in 2017 and 5.7 percent in the first quarter of Change within the retail sector has 2018. In fact, sales have increased been well-documented: pressure every year since the 2009 downturn. from Amazon and internet retailers; The issue is the ability of retailers the changing spending habits and the retail market to recognize of consumers; the influence of and adapt to change. private equity and resultant high debt levels; discretionary spending OKC Retail Performance being squeezed by health care expenditures and student debt; Why is the Oklahoma City retail and the world of digital marketing. market not as vibrant as it seems All during an increasingly uncertain like it should be? Unemployment is national political and economic under 4 percent, energy prices have environment. rebounded nicely in the last year; City and State sales tax collections Retailers have reacted to these are up significantly; new business changes both positively and relocations and expansions are up. The pressures of change within retail negatively: store closures and Add to this the positive effect of in general are part of the answer, but bankruptcies; downsizing/ the national tax cuts and reduced we see a couple of local influences rightsizing; reducing costs; creating regulation and you would expect dampening the market. Despite better shopping experiences; re- a stronger retail market. But, our rising energy prices, there is a training staff and improving product survey numbers show increased continued energy market hangover mixes; optimizing digital presence; vacancy in the first half of the year, from the last few years. Energy opening new concepts; focusing 10.7 percent from 9.8 at year- firms have become very efficient; on value & convenience. Favored end. Retail development of any consequently, most of the highly tenants in this environment include significance has slowed. Local paid workers laid off over the best of class, service-oriented, retailers in particular are being past few years haven’t been hired health/fitness, and discounters. hesitant about expansion and back. This has hurt wage growth. adding stores. Oklahoma population growth Retail spending isn’t an issue, retail has slowed considerably as well, .7 percent in 2017, 1.3 percent in OKC TOTAL RETAIL MARKET VACANCY OKC TOTAL RETAIL MARKET INVENTORY 12% 50 GLA SF Freestanding SF 10% 40 8% 30 6% 20 4% (millions of square feet) (millions of square 10 2% 0% 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 1 2016, 1.6 percent in 2015 (per World Amazon fulfillment center that is is a bit of an anomaly as smaller Population Review). Retail feeds off under construction near the airport malls have typically not faired well population growth and wage growth. which should reinforce Amazon’s nationally. Some smaller tenants And the effect on smaller retailers presence and allow for same day have closed, including Forever 21, is typically more pronounced as delivery in the future. The net result however the real question with they have less flexibility to adjust of all this activity is a bit of a mixed Sooner Mall is Sears and JC Penney. to changing market conditions than bag consistent with the national and If they close in the next couple of larger national firms. local influences we are seeing. years, it will put a lot of stress on the Mall. The 200 or so class C malls Let’s take a look at how these changes around the country are expected are playing out in Oklahoma City. Our Malls to fail; Oklahoma City has already Several retailers have closed in the experienced this with Crossroads last six months which has negatively The general thinking is that class A and Heritage Park. effected occupancy: three Toys R Us malls are performing well and will stores and the Baby’s R Us store, the continue to perform well. We see three Gordman’s closures, and the this at Penn Square Mall, sales are Survey Footnote: Sears store closures (including the over $700 per square foot and the recently announced closure of their tenant mix remains strong; Simon Our survey tracks 30.1 million square 44th and Western location). Several has been able to replace tenants feet in 260 buildings of over 25,000 retailers have also downsized stores that have vacated and the Container square feet and 15.4 million square or are in the process of downsizing, Store is a good addition. Class B feet of stand-alone buildings for a including Kohl’s, Burlington, and malls nationally are seeing signs of total market of 45.5 million square Office Depot. Conversely, a number stress and are having to embrace feet. There continues to be a of retailers have expanded locally, new tenants and new strategies, in significant number of smaller strip HomeGoods, Five Below, Dollar some cases adding housing and centers in the market (under 25,000 Tree, Aldi, and Sprouts among alternative uses. Quail Springs s.f. in size). We would estimate there others. And, we have added Mall falls in this category as they’ve are close to 6.0 million square feet several new to the market retailers: seen some increased vacancy, of these properties in the market. Lifetime Fitness, Duluth Trading, particularly in the east wing and they the Container Store, Uncle Julio’s have torn down the former Macy’s and, the announced additions of building and added Lifetime Fitness Costco and Urban Air. This doesn’t in the parking lot (not connected to include the retailers who are actively the mall). Quail Springs won’t fail, looking in the market: highlighted but General Growth has its work cut by REI, Restoration Hardware, and out to reinvent the Mall to keep it Capitol Grille. Not to mention the relevant. Sooner Mall in Norman OKC TOTAL RETAIL MARKET ABSORPTION 0.5 0.4 0.3 0.2 0.1 (millions of square feet) (millions of square 0.0 -0.1 -0.2 2014 2015 2016 2017 2018 GLA SF Vacant SF Vacant % OKC Retail Market Totals 30,101,449 3,223,922 10.71% 3 Oklahoma City Quick Hits In a landmark decision on June 21, the US Supreme Court ruled on a case in- volving whether states can require remote sellers to col- lect sales tax. The decision, in South Dakota v. Wayfair Inc., gives states the authority to require remote sellers to collect sales tax. This will have important effects on state govern- ments, consumers, and retailers. Source: Tax Policy Center | June 26, 2018 Oklahoma’s new liquor laws Alcohol consumers will notice several changes beginning Oct. 1. A larger variety of products, more beverages sold cold and strong beer options are some of the differences resulting from the passage of State Question 792. Here are a few of those changes: • Liquor stores will be able to sell refrigerated beer and wine. Total retail sales in the United States • Grocery stores and gas stations will not be allowed to from 2012 to 2020 (in trillion U.S. dollars) The amouht of occupied retail real sell liquor. • Grocery stores and gas stations will be able to sell estate in 77 major U.S. metropolitan chilled beer stronger than 3.2 percent alcohol by vol- ume. areas dropped by 3,800,00 • Many 3.2 alcohol products eventually will be re- stocked with the company’s standard strength prod- square feet in the second quarter, ucts. • Wine and spirits stores will be able to sell items other the largest decline since 2009. than alcohol, as long as those sales don’t exceed 20 percent of monthly sales. Source: Bloomburg | July 3, 2018 Source: NewsOK.Com | May 10, 2018 2018 Mid-Year Oklahoma City Retail Market Summary NORTH SUBMARKET The North Oklahoma City submarket has always led the Oklahoma City market and is now leading it with change. Vacancy ended the first half of the year up at 8.0 percent from 6.1 percent at the end of 2017. Big box closures include two Gordmans, a Toys R Us and the Babys R Us at Belle Isle. Hobby Lobby will be taking the Memorial Road Gordmans, but vacating their existing space. The big box closures have offset some positive developments in the market such as the opening of the restaurants at the Pointe at Chisholm Creek and the addition of several new retailers to the market. The Memorial Road Corridor is still where retailers want to be. Out of the 7.0 million square feet of space in the submarket, nearly half is along the Memorial Road Corridor. Needless to say, there is still a lot of activity in this submarket. Lifetime Fitness should open on the former Macy’s parcel at Quail Springs Mall soon. Costco will be starting construction at the southeast corner of Memorial Road and Western. Shoppes at Quail Springs is continuing their lease-up.

Load more

  23

Copy Link